Flashcards in Taxes: Personal & Dependency Exemptions Deck (7)
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1
Taxes:
Personal & Dependency Exemptions
Personal Exemptions
General
- can only be claimed once
- can be claimed even if died during year
- can be claimed if no self-return on spouses return
2
Taxes:
Personal & Dependency Exemptions
Dependency Exemptions
Dependency Exemptions
- must meet all tests to qualify
Qualifying Child
- Relationship Test: natural child, stepchild, adopted child, sibling, step-sibling, or descendant of these
- Residence Test: same principal place of residence for more than half the year
- Age Test: under 19 or under 24 if full time student 5 months of year, child must be younger than taxpayer unless disabled
- Joint-Return Test: dependent cannot file married-jointly
- Citizenship: must be a citizen/resident of US, Canada, or Mexico
- Not Self-Supporting: provided less than 50% own support
3
Taxes:
Personal & Dependency Exemptions
Dependency Exemptions
Tie-Breaker Rules
Tie-Breaker Rules
- more than 1 individual qualifies to claim:
- parent must claim unless another with higher AGI
- parent with whom child resided longest
- parent with highest AGI
- individual with highest AGI
4
Taxes:
Personal & Dependency Exemptions
Dependency Exemptions
Qualifying Relative
Qualifying Relative
- Relationship Test: all common relatives except for cousins, but including step parents, siblings, and inlaws
- Support Test: provide more than 50% support
- Gross Income Test: less than exemption amount $4k
- under 19 or
- under 24 and full time student
- Joint-Return Test: dependent cannot file married-jointly
- Citizenship: must be a citizen/resident of US, Canada, or Mexico
5
Taxes:
Personal & Dependency Exemptions
Dependency Exemptions
Multiple Support Agreements
Multiple Support Agreements
- group of tax payers who support more than 50%
- each is eligible for exemption
- provides over 10% but less than 50%
- written agreement allocates a dependency exemption to one individual. All must sign
6
Taxes:
Personal & Dependency Exemptions
Dependency Exemptions
Divorced Parents
Divorced Parents
- divorced or legally separated last 6 months of year
- parent with custody (over half) gets deduction
7
