One’s home is always the best place to turn to whenever life throws its usual and seemingly unfair punches. The best possession an individual can have is a supportive family where one is guaranteed support during hard-hitting times. These tough economic times that has left many jobless young adults without much prospects for employment, which has resulted in masses of them seeking refuge in their parents’ homes. Although parents have unlimited love for their children, they don’t necessarily have unlimited funds to help them. However, there are some methods of being able to lighten the financial strain of taking in a loved one. As loving parents take their kids back into their homes, there are some tax breaks that one can take advantage of.
It is common knowledge to parents that every minor child can be claimed as a dependent. This means that they automatically benefit from a claimable exemption. In 2011 returns, this amounted to about $3,700 deducted from the gross income while in 2012 tax year, the exemption was $3,800. These figures are dependents who are minors. What of the adult-children who just returned home? Well, the situation is not as bad, as you can still qualify for the extra exemption.
Even though your child, who is now an adult, might not qualify as a dependent child, it doesn’t change the simple fact that the grown child will always remain a baby, at least to you. The adult child can however, be counted as an eligible relative for the purposes of tax dependency. This can only be the case if the individual meets three other requirements:
To begin with, you child must live with you or at least be under your care as a member of your household for the whole year. If the individual is related to you, then he or she doesn’t necessarily have to live in your house all through the year. The second factor requires that the individual’s cumulative gross income doesn’t exceed the exempted amount, which was in 2011, set at $3,700. Finally, you must be providing over 50% of the individual’s support for the tax year. So long as the individual is not making anything more than $3,700, these requirements are not so tough to meet.
On meeting all the listed requirements, ensure that you claim the person as a dependent to benefit from the additional exemption value. Also bear in mind that this exemption is not only limited to your children. There are people who help their aging parents as well, who can be counted as dependents for tax reasons. These steps will help alleviate the financial load that comes with providing for a loved one.