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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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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:

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Can I Claim the Child Tax Credit 2014?

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 Continue reading “Can I Claim the Child Tax Credit 2014?”