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What You Need to Know About Claiming Your Dependent Relative

Taking care of an aging parent or relative can be hard, not to mention expensive. The good news is that you may be able to claim them on your tax return and get a bigger refund.

Supporting a relative can impact many areas of your life.  The most obvious are the changes to your living situation, amount of free time you have, and your finances.

To help relieve the financial strain of caring for a relative, you can report these relatives as dependents on your tax return. Doing so can save you thousands of dollars in taxes, because for every qualified dependent you claim your taxable income is reduced by $3,950.

Your dependent will belong to either one of the two following categories:

  • qualifying child 
  • qualifying relative

To learn more about claiming a qualifying child, refer to this RapidTax post.

Who Can I Claim as a Qualifying Relative Dependent?

The term “relative” may be unclear. For example, is your cousin’s wife considered your relative? How about his ex-wife? Continue reading “What You Need to Know About Claiming Your Dependent Relative”

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What You Need to Know About Claiming Your Dependent Child

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
  • They are under the age of 19, or  if 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
  • 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 Continue reading “What You Need to Know About Claiming Your Dependent Child”
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How To Report Insurance If Covered Under Parent’s Plan

If you’re covered under your parent’s health insurance plan, you won’t face tax penalties when filing your 2014 Taxes 

If you’re in your early twenties and recently entered the “real world”, you know first hand how overwhelming it can be.

Not only do you feel the pressure to succeed in your first job, but you’ve also been slammed with bills you’ve never seen before. From paying student loans to coughing up rent and everything in between, you’ve got a lot on your plate.

Thanks to the Affordable Care Act aka Obamacare, paying for health insurance isn’t yet on your list of concerns. Keep in mind however,  you’ll need to report your insurance coverage on your 2014 Tax Return. RapidTax is here to help!

Who is Eligible for Coverage under Parent’s Plan?

You may be unsure if you qualify to be covered under your parent’s health insurance plan. Here’s what you should know: