Feb 5, 2012

The new dependents

Are your adult children living in your household? Are your elderly parents living with you?  Or maybe both?  
If so, you're part of a growing national trend. A Pew Report reveals that in 2009, fifty-million plus Americans were living in multi-generational households. About 20% of Americans older than 65 live in a household with another generation.

My guess is your adult kids or your parents have moved in with you for many reasons. Maybe you're your parent's caregiver. Your adult child may have lost his job, or perhaps has been unable to find one following graduation. Although you may not be looking for any economic tit-for-tat, the truth is that under certain circumstances, you may be able to claim these individuals as dependents on your income tax return. Why turn down a gift from Uncle Sam?

To claim a person as your dependent, the individual has to be US citizen, and you must have paid for more than half of the person's support.  The person cannot have earned over $3,700 in the tax year, although Social Security and disability payments are not figured in this amount. The rules can be complicated, but there is a  simple survey on the IRS website that can help you determine if you can claim the person living with you as a dependent.  

Happy deducting.

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