Claiming your child as a dependent is an obvious measure. But did you know that you can claim exemptions for elderly parents or other relatives that qualify as dependents? For each dependent, you can deduct $4,000 from your federal taxable income. Here is how to tell if you can claim a dependency exemption:
- The person must be a relative or live in your household the entire year. The category of relatives is broad and includes people from a foster child to youâ€™re a sister-in-law. Check out the IRS website for a complete list of who qualifies as a relative.
- The personâ€™s taxable income must be less than $4,000 â€“ keep in mind that this changes every year.
- Half of the support needed for a dependent must be paid for by you during the year.
Filing people as dependents can be a confusing process. Luckily, Bloch, Rothman, and Associates are here to help you with your Denver tax return to make sure that you are getting the most out of your deductions and exemptions. Give us a call today for a free consultation!Â