Dependent

Many people feel they have “dependents” and that by informing their accountans as such, that will help them with a tax deduction at tax filing time.  While that is true to an extent, many people do not still know the exact definition of what a dependent is, especially with the new Working Family Tax Relief Act of 2004 passed by the Bush Administration. If you are a nonresident alien (F1, H1B, L1, B1, etc.), click here.

Essentially, a dependent is the following:

  1. A Qualifying Child, or
  1. A Qualifying Relative.

Unless you are part of that small group of taxpayers whose dependent deduction is phased out completely (dependent deductions are phased out at certain income levels by 2% of each $2,500 or $1,250 for married filers by which AGI exceeds thresholds—to be eliminated in 2010.), most likely you will qualify for some dependent deduction if you can satisfy the above two requirements. 

The first part of the requirement, Qualifying Child, has only 3 components:

  1. Close Relative (i.e., son, daughter, stepchild, brother sister, stepsibling, or descendant of one of these).
  2. Age Limit (up to age 19 if not a student or up to age 24 if full time student).
  3. Must have the same principal residence as the taxpayer (it’s okay if he/she is away at college for a undergrad/grad degree as that is considered temporary stay).

The second part of the dependent requirement, Qualifying Relative, has actually 6 components:

    • Taxpayer must provide more than 50% of the support for the relative.
    • The relative must have gross income under the exemption amount for the taxable year (exceptions to this component are qualifying children, defined above).
    • Dependent may not file a joint return unless solely to get a full refund of taxes withheld by employer.
    • Dependents may only be residents of U.S., Mexico, or Canada.
    • Dependent may be a blood relative except a cousin.
    • Those dependents who are nonrelatives must live with the taxpayer the whole year.

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2017 Annual Adjustment Amounts: Tax Rates, Deductions, & Exemptions;


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2016 Annual Adjustment Amounts: Tax Rates, Deductions, & Exemptions;

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2015 Annual Adjustment Amounts: Tax Rates, Deductions, & Exemptions;

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2014 Annual Adjustment Amounts: Tax Rates, Deductions, & Exemptions;

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Questions & Answers on NII & Additional Medicare Tax

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Are you living abroad and a dual citizen?? Click here.

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"OVDI" (Offshore Voluntary Disclosure Program) Remains Open For Those With Undisclosed Foreign Income/Assets;

Other Options other than OVDP remain open too, like Streamlined Procedures.

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DNA India, a leading Mumbai daily, quotes Vimlan Tax Services. Click here...

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Mileage Rates for 2016 are here..

  1. 54 cents per mile for business miles driven (down from 57.5 cents in 2015);
  2. 19 cents per mile driven for medical or moving purposes;
  3. 14 cents per mile driven in service of charitable organizations;


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Mileage Rates for 2015 are here..

  1. 57.5 cents per mile for business miles driven (up from 56 cents in 2014);
  2. 23 cents per mile driven for medical or moving purposes;
  3. 14 cents per mile driven in service of charitable organizations;


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International Income Tax Liability...


Worldwide Income Reporting and Foreign Accounts

Most people filing US tax returns know if they are a US Citizen or a Greencard holder, but most do not know if they are a US "tax" resident. You may read the April 2011 E-newsletter we put out which explains the classifications mentioned above or call our office to request an appointment with a qualified tax advisor to discuss your case. Our December 2015 E-newsletter is out as well.