This time of year, everyone's looking for ways to reduce their
taxes. Claiming dependents is a great way to get more personal
exemptions and cut your taxable income by as much as $3,900. But
who qualifies as a dependent?
In the following video, Dan Caplinger, The Motley Fool's
director of investment planning, goes through what it takes to
claim a dependent on your taxes. Dan notes that children age 18
or younger, or full-time students up to age 23, are the most
typical dependents, with the requirement that the child live with
you for more than half the year and that you provide half the
child's financial support. But Dan also notes that other people
can count if they live with you or if they are sufficiently close
relatives, including parents, grandparents, uncles and aunts, or
in-laws. However, their gross income has to be less than $3,900
and you must provide more than half of their financial support.
With the tax deduction worth as much as $1,500 to some taxpayers,
it's worth looking into whether you're claiming all the
dependents to whom you're entitled.
Take advantage of this little-known government tax
Recent tax increases have affected nearly every American
taxpayer. But with the right planning, you can take steps to
take control of your taxes and potentially even lower your tax
bill. In our brand-new special report "
The IRS Is Daring You to Make This Investment
The IRS Is Daring You to Make This Investment Now!," you'll
learn about the simple strategy to take advantage of a
little-known IRS rule. Don't miss out on advice that could
help you cut taxes for decades to come.
Click here to learn more.
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