Tag: dependents

Learn more about claiming dependents on your taxes with these articles from RapidTax

Posts Tagged ‘dependents’

Can You Claim Parents as Dependents?

Posted by Robert Flanagan on December 6, 2016
Last modified: December 19, 2016

Sometimes we’re so busy growing up that we forget they’re growing old.

Everyone knows that claiming a dependent on your income tax return can get you a significantly larger refund. For every dependent you claim on your taxes you can claim an extra personal exemption. That’s a large chunk of change you can deduct from your income, thus reducing your tax burden.

But who exactly can you claim? Are you eligible to claim your parents as dependents?

When it comes to taxes there are actually two different types of dependents: qualifying children and qualifying relatives.

Obviously, you can’t claim your parents as qualifying children. So the question becomes, do they meet the requirements for qualifying relatives? (more…)

Someone Else Claimed My Dependent

Posted by Michelle O'Brien on October 27, 2016
Last modified: March 21, 2017

Did the IRS reject your tax return because someone else claimed your dependent?

Claiming a dependent is usually pretty simple: you give the IRS their social security number, certifying that your relationship with that person satisfies a few simple rules.

Things can get more complicated, especially if someone else also claims the same person as a dependent. If they file their return first, the IRS will assume it’s legitimate and award them the full tax benefit of the dependent. When you attempt to e-file your return, it will be rejected.

What can you do then?

The process is fairly straightforward. After your e-filed return has been rejected because someone else claimed the same dependent, you need to file a paper return. You can still prepare your return online. Instead of e-filing, you will need to print it out, sign it, and mail it to the IRS.

With your return, include a cover letter explaining your situation to the IRS as well as evidence proving that you have the right to claim the dependent (ie: medical records, school records, etc.).

The IRS will then review both returns claiming that dependent and determine which person should be claiming the dependent based on tax law. (more…)

How to Fill Out a W-4 Correctly

Posted by Robert Flanagan on October 27, 2016
Last modified: October 28, 2016

Filling out a W-4 is less mind-boggling than you think.

One of the first things you have to do when you get a new job is fill out a Form W-4 [Employee’s Withholding Allowance Certificate]. It is essential to complete a W-4 correctly because it determines how much tax will be withheld from your pay and how large your tax refund will be.

The first half of the form is pretty easy. You just have to fill in your name, address, and marital status.

Then you have to figure out how many allowances to claim. This number will determine the amount of your withholding.

Number of allowances to claim

Generally the number of allowances you should claim will correspond to the number of personal and dependency exemptions you can claim on your tax return, but this is not always the case. Claiming zero allowances will result in the maximum amount of tax withheld. Every additional allowance you claim on top of that means that a little less tax is withheld. (more…)

How to Claim the Child Tax Credit

Posted by Robert Flanagan on October 27, 2016
Last modified: October 28, 2016

Parents deserve a bit of a (tax) break now and then.

As a busy parent, filing taxes can be found on the To-Do list between Monday’s soccer practice and Thursday’s parent-teacher conference. Do yourself a favor this year and see if you are eligible for the Child Tax Credit. Tax credits are great because, unlike deductions, they reduce your tax bill dollar-for-dollar. That means, a larger tax refund for you and your family!

What is the Child Tax Credit?

The Child Tax Credit offers a credit of up to $1,000 per child to qualifying taxpayers. It is only available to those who can claim a child as a dependent and meet several other requirements.

There is no limit to the number of children you can claim using the Child Tax Credit, however, claiming lots of kids may subject you to the Alternative Minimum Tax (AMT).

Who can claim the Child Tax Credit?

In order to claim the Child Tax Credit, the child in question must: (more…)

7 Filing Tips to Get Your Tax Refund ASAP

Posted by Robert Flanagan on March 9, 2016
Last modified: October 6, 2016

Waiting for your tax refund can really test your patience.

Unfortunately, we can’t speed up the actual processing time of your tax return once the IRS gets hold of it. However, there are actions we can take to ensure a smoother journey through the IRS database. Let’s take a look at seven steps you can take when filing your tax return this year.

E-File your tax return.

Oh, how far technology has come. You can e-file your tax return worry-free until the April deadline. After that date, you can still e-file until the October deadline. However, if you can’t get it filed before mid-April and you’re not sure if you’re getting a refund, you’ll want to file an extension. Either way, the IRS processing time is quickest with e-filing. Compared to mailing in your return, you could be speeding up your refund by almost a month!

Choose direct deposit to receive your refund.

Many businesses offer a direct deposit option to their employees, so it only makes sense that the IRS would offer the same. After all, it’s your money. This is preferred by many taxpayers, based on convenience. On top of that, waiting on direct deposit will eat up less of your time than waiting on a check in the mail.

Make sure you’re the only one claiming your dependent(s).

This can be easier said than done in some cases. However, if you know someone who could also claim your dependent on their tax return, do your best to verify that they won’t be. Why? A person can only be claimed once per year. If a dependent is claimed by more than one person, then the second tax return to claim them will be rejected by the IRS. If the second person to claim the same dependent appeals to the IRS, the IRS may pull the first return for review, to make sure that taxpayer was allowed to claim the dependent. In either case, this will ultimately delay your tax refund. (more…)

How Many Kids Can You Claim on Taxes?

Posted by Robert Flanagan on January 20, 2016
Last modified: December 16, 2016

Kids are great! But they can be taxing…in more ways than one.

Growing up, my parents would always give me an increase on my allowance around April. They would say it was to teach me how to budget my money. Not to sell out my parents or anything but now I know that they were able to give me a little extra once a year because they were getting more back from the IRS after filing and claiming me as a dependent.

Let’s just say, those little bonuses stopped once I began filing my own taxes.

Is there a limit to how many dependents I can claim on my tax return?

No, there is no maximum amount of dependents you’re allowed to claim on your tax return. You can claim all dependents who are qualified child dependents according to IRS rules. Consider it a token of appreciation for supporting the ever-increasing costs of diapers, astronomical college tuition fees and for simply putting food on the table each night.

What qualifies a child as my dependent?

You may see this question to have a simple answer if you are married parents filing a joint return. However, for single parents, married parents who file separately or other relatives, the answer is not as clear.

A qualifying child dependent has slightly different requirements than a qualifying relative dependent does. In order to be considered a qualifying child dependent, they must meet all of the following requirements:

(more…)

Earned Income Tax Credit Tips for Married Filers

Posted by Robert Flanagan on March 27, 2015
Last modified: October 6, 2016

First comes love, then comes marriage, then comes a baby… and the Earned Income Tax Credit?

Here’s one for the next round of Jeopardy: the Earned Income Tax Credit or EITC was designed to offset the burden of Social Security taxes paid by low to middle income working families.

And here’s one you can take to bank: if you find yourself struggling to provide for your family you may qualify for the EITC and increase your refund at tax time .

Whether you qualify, not to mention the amount of the credit you’ll receive, depends on your income and how many qualifying children you’re supporting.

Eligibility is based on your income and your filing status

First, in order to qualify, you must file your tax return as married filing jointly. Your filing status can not be filing separately.

Second, your income earned (that is, the wages you received from your job or the net profits you made from self employment), can not exceed a certain threshold.

If you’re married filing jointly, your 2014 adjusted gross income, must be less than:

  • $52,427: 3 or more qualifying children
  • $49,186: 2 qualifying children
  • $43,941: 1 qualifying child
  • $20,020: no qualifying children (more…)

Earned Income Tax Credit Tips for Single & Head of Household Filers

Posted by Robert Flanagan on March 26, 2015
Last modified: October 6, 2016

The Earned Income Tax Credit can add a total of up to $6,044 to your tax refund!

Being a single parent is no picnic. Parenthood is a tough gig, especially when you’re on your own.

Raising a family on one source of income is enough of a headache. On top of that, you have dinner to cook, homework to help with, and sports games to attend. It’s clear, you have a lot on your plate and could use more money in your pocket.

Here’s something you must know: to lessen the financial burden of being a single parent, the IRS offers the Earned Income Tax Credit to qualifying tax filers.

Why Your Income Matters

The EITC or EIC is a refundable tax credit that is only offered to taxpayers who earn low-to-moderate income from their job or from being self-employed. That means if you don’t work, you cannot claim the credit.

In addition, once your income goes over a certain threshold, you won’t qualify to receive the tax credit. (more…)

What You Need to Know About Claiming Your Dependent Child

Posted by Robert Flanagan on February 25, 2015
Last modified: October 6, 2016

Here’s what you should know about claiming a dependent child on your taxes…

When filing your taxes, you’ll want to report the expenses that come along with the responsibilities of raising a child.

One way to do this is by claiming your child as a dependent. Each dependent you claim on your tax return will lower your total taxable income by one exemption. That means you’ll end up receiving a larger tax refund!

Keep in mind however, each dependent can only be claimed by one tax filer. Additionally, the dependent you’re claiming must qualify as either of the following:

  1. a qualifying child
  2. a qualifying relative

Who is considered a Qualifying Child Dependent?

In order to claim someone as your qualifying child, he or she must meet the following criteria:

  • Be your biological or adopted child, stepchild, foster child, sibling, half sibling, stepsibling, or a descendant of one of these
  • Be under the age of 19 or,  if he or she is a full-time student, under age 24 (There is no age limit if the child is permanently disabled.)
  • Be a U.S. citizen or U.S. resident, or a resident of Canada or Mexico
  • Be unmarried, or married but not filing a joint return
  • Have lived with you for at least half the year, unless absent due to illness, education, business, vacation, or military service
  • Have not provided more than half of his or her own support (more…)

Can I Claim the Child Tax Credit 2014?

Posted by Robert Flanagan on January 26, 2015
Last modified: October 6, 2016

If you meet the requirements to claim the Child Tax Credit 2014, expect to see a larger tax refund in 2015

If you have a child, you know first hand that being a parent changes your life.

Along with the new responsibility comes the expenses of having a child, such as food, clothing, classes, pictures, day care and so much more. Luckily, the IRS offers a few tax advantages to help with the never ending costs. One in particular is the Child Tax Credit.

Keep in mind however, just because you have a child, it does not automatically qualify you to claim the Child Tax Credit on your 2014 Taxes.

In order to claim the credit on your 2014 Tax Return, you’ll have to meet the 7 IRS Child Tax Credit requirements

1. Relationship

In order to claim the child tax credit, the child must be one of the following;

  • your child
  • your stepchild
  • a foster child placed with you by a court or authorized agency
  • an adopted child (even if the adoption is not final by the end of the tax year)
  • your brother
  • your sister
  • your stepbrother
  • your stepsister
  • your niece
  • your nephew (more…)