Relatives as Dependents more Relevant than Ever

More and more, we are teaming up in families to support each other.  As we care for elderly parents, sometimes because we have lost jobs or pensions, as adult children move back in with parents as a result of loss of jobs or homes, we find ourselves living multi-generationally.  

IRS gives some guidance: “Your mother received $2,400 in Social Security benefits and $300 in interest. She paid $2,000 for lodging and $400 for recreation. If you spend more than $2,400 to support her, supplementing what she spends, and if her annual income is less than $3,800, you can claim her as a dependent and take the full value of the exemption.”

If you are taking care of someone and that person’s care meets the IRS guidelines for age, income, residency tests and support, you might be able to claim the exemption. A qualifying relative does not need to live with you, but you must provide at least one half of his or her support. Furthermore, that person’s income cannot exceed the personal exemption of $3,800 in 2012.

For more information as you find out if you qualify to claim a relative as a dependent, call Afiya @ 404-532-9958.