With Tax Refund Payments Reaching Homes You Can Save Thousands Of Dollars If You Declare All Your Dependents

Tax Refund

Declaring your dependents wholly and correctly can go a long way in getting a decent tax refund check, or it could mean paying much less in taxes. It could save you thousands of dollars on your income taxes every year. And it becomes more pertinent as most federal support measures post-pandemic are withdrawn. 

Many of us are either not aware of who qualifies as a dependent or just chose to ignore the fact in our income Tax Refund without realizing that it could mean the difference between getting a tax refund or ending up paying a hefty income tax. 

The end of federal pandemic-related largesse has meant the end of the enhanced version of the Child Tax Credit stimulus check. We are back a full circle as inflation has decimated the economic boom that followed the pandemic. 

The IRS tax refunds are naturally restricted this year as it was the states that gave out stimulus checks in 2022. But there are still some payments expected and taxpayers need to be careful in their filing to get the most out of it. 

Towards this end, the inclusion of dependents is vital. If you claim someone as a dependent, deductions like the earned income tax credit (EITC) and Child Tax Credit. Deducing who qualifies as a dependent is important for tax filing. It could make a significant change in your tax refund check or increase the amount of the tax refund you will receive after filing your taxes. 

Defining A Dependent Rightly Increases Your Tax Refund Or Lessens Your Tax Liability

For tax filing, a dependent is defined as someone other than the taxpayer or their spouse. A dependent qualifies to be claimed by someone else on their Tax Refund. Or to put it in simple terms, a dependent is someone who relies on another person for financial support that includes food, housing, clothing, and other necessities. 

Under normal circumstances, this includes children and other dependent relatives. It can also include people who are not directly related to them, including a domestic partner. 

Claiming A Partner As A Dependent

You can claim your partner, including a girlfriend or boyfriend, as a dependent on your federal taxes. But that person who is to be declared a dependent must meet certain requirements set down by the Internal Revenue Service. 

To qualify as a dependent, your partner must have lived with you, the taxpayer, for the entire calendar year and listed your home as the official residence for the whole year. 

If your partner has a gross income above a certain amount, which is $4,400 for the 2022 tax year, you cannot claim that person as a dependent. 

You can claim your partner as your dependent on your income tax filing if that person meets the IRS definition of a qualifying relative. The word “relative” can be misleading, and you should not get tripped by it. It can include an unrelated person who passes 4 following tests concerning that is linked to residency, income, support, and finally status. 

Your partner should be a household member. That indicated that they must have lived with you for the whole year for which the status of dependency is being claimed. The only exception that the law makes is for temporary absences that include vacation and medical treatment. But your home must be your dependent’s official residence for the full year. 

But your living situation must not violate state and other local laws. You cannot claim that individual as a dependent in such cases. For instance, two unmarried persons living together is considered “cohabitation” in some states and is against the law. In such states, your boyfriend or girlfriend will not be considered as qualifying for a dependent. 

Your Partner’s Earning Is Also A Factor For Tax Refunds

If your partner has gross income above a certain amount, you are not allowed to declare that person as your dependent to file your income Tax Refunds. Any gross income that your partner earns and which is subject to tax is included. It can be interest calculated on a bank account, wages, or other types of income that is subject to tax as laid down by law. 

The limit for gross income varies with each other and for the tax year 2022, the limit for income for dependents has been set at $4,400. The amount you spend on your partner is also a factor. You must have paid over half of your partner’s living expenses during the calendar year for which you desire to claim them as your dependent for purposes of income tax. 

While you calculate the final support amount, you must include the amount of support that you and also other people have provided and also the own fund of the individual, who is being considered as a dependent. 

If your partner is already being considered a dependent by another person, you cannot do the same. Only a single person, or a single Tax Refund in the case of a married couple filing jointly, can be claimed as a specific tax dependent in any given tax year.

 Further, you cannot normally claim a married person as a dependent if they have already filed a joint Tax Refund with their spouse. 

The IRS has many online aids for helping filers determine whether their boyfriend or girlfriend qualifies as a dependent. That includes asking you to give some simple answers to their living situation, and also knowing beforehand exactly where the person being considered to be claimed as a dependent is eligible. 

Claiming Tax Refund For A Qualifying Child 

To claim a child for a dependent, you must be able to meet all the stipulated criteria. This includes the main point of whether they are related to you. The child should be your biological child or your stepchild. Even foster children are eligible. The child can also be your sibling, half-sister or brother, stepbrother, adopted child, or any of their children. 

The second important point is that the child must be under nineteen years. Five years will be considered if the child is a full-time student. The child must have lived with you for more than six months, subject to several exceptions. While your child may have a job, they are not allowed to claim over 50% of their support.