Can You Claim Your Parents as Dependents?
You already know that you can claim your children as dependents on your taxes until they are old enough to be financially independent…but what about an instance in which you care for a parent or elderly family member?
Could you claim your parents as dependents on your taxes?
Factors the IRS Considers…
The answer is yes, IF you meet certain criteria. You might very well be able to claim your parents as dependents and give your taxes a boost. To make this determination, the first thing the IRS looks at is your parents’ income level. In order for a parent to qualify as a dependent, they cannot earn or receive more than the exemption amount for the year. The IRS determines this amount each year, which means it can change each year. So it is wise to check on these parameters for the year so you know where you stand. You might be wondering if social security income counts – and the answer is…not usually.
The next factor the IRS looks at is how much support you have provided your family member over the course of the year. In order to claim your parent as a dependent, you must be providing them with more than half of their overall financial support. This includes their living accommodations (room in your home in which they live), food, utilities, general living expenses and even any medical expenses you have covered for them. In order to claim them, your support “value” must be more than the income that they receive.
One important thing to note is that even if you do not qualify to claim your parent as a dependent, you may still be able to deduct many or all of the medical expenses that you incur throughout the year. Your total medical expenses must be more than 10% of your adjusted gross income in order to deduct these expenses.
How to sort this out…get help!
The bottom line? If you are spending time and money caring for an elderly parent or relative, you should spend some time determining whether you could claim them as dependents or, at the very least, whether you can deduct some of the related expenses on your next tax return. This process can get complicated quickly and the rules may change from year to year, so you may want to consider enlisting the help of a reputable tax firm to help. A tax firm can review your documents, receipts, and income information to determine whether you meet the current criteria established by the IRS.
Success Tax Relief has helped thousands of clients over the last thirty years make serious decisions about the best possible strategies for submitting annual tax returns. We have received consistent positive feedback from our customers, pointing to strong customer service and attention to detail as specific strengths. Contact us today to discuss your unique situation and discover whether you meet the criteria that must be met for claiming parents as dependents.