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Who Can You Cliam On Your Tax Return ?

  Sanjiv Gupta CPA  Published 
Who Can You Cliam On Your Tax Return ?

How much taxes you pay largely depends upon how much you earn.  However, it is equally dependent upon how much you can deduct to lower your taxable income. Even though the deduction taken by each individual is different, some tax rules affect every person.  Rules including dependent deductions and exemptions apply to all of us.

According to the Internal Revenue Services, there are six important facts about dependents and exemptions that will help you file your 2011 tax return.

  1. Exemptions:  There are two types of exemptions: personal exemptions and exemptions for dependents. For the year 2011, you can claim a $3,700 exemption for each dependent including yourself.
  2. Your spouse is not your dependent, At least not on your Tax Return.  If you are filing jointly, you can claim one exemption for yourself and one for your spouse. However, If you’re filing a separate return, you may only claim the exemption for your spouse if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.
  3. Dependent Exemptions. As stated earlier you can take a $3700 exemption for your dependents. However, you need to make sure dependent is qualified as per the IRS guidelines. IRS defines the dependent is your qualifying child or qualifying relative.  You can learn more about Dependent Qualification by visiting IRS Dependent Tax Tutorial.
  4. If someone else claims you as a dependent, you may still be required to file your own tax return.  Some taxpayers do not file the tax return just because they were claimed as dependent by their parents of someone else.   Filing a tax return is based upon many factors including the amount of your unearned, earned or gross income, your marital status and any special taxes you owe. 
  5. If you are a dependent, you may not claim an exemption.  Exemption of each person can be only claimed once.  If someone else—such as your guardian or parent—claims you as a dependent, you may not claim your personal exemption on your own tax return.
  6. Some people cannot be claimed as your dependent. Generally, you may not claim a married person as a dependent if they file a joint return with their spouse. Also, to claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year.

Exemptions are Deductions that can help you reduce your tax liability but you must do your homework.  Incorrectly claimed exemptions may result in higher taxes and huge penalties.  Fraudulently claimed exemptions and deductions can also result in criminal charges.