New blog by US Tax Professionals in Vancouver outlines the criteria necessary to claim dependants for tax benefits
North Vancouver, BC -- (ReleaseWire) -- 02/13/2020 --Taking care of an elderly parent or any relative can be emotionally and financially draining. Fortunately, US Tax Professionals in Vancouver has some good news: if certain criteria are met, it's possible to claim a relative as a dependant and enjoy some relief come tax time. For more, go to https://us-taxprofessionals.com/newsletter.php#5
The IRS defines a dependent as a qualifying child or relative. A qualifying relative can be your mother, father, grandparent, stepmother, stepfather, mother-in-law, or father-in-law, for example, and they can be any age.
There are four tests that must be met in order for a person to be considered your qualifying relative: not a qualifying child test, member of household or relationship test, gross income test, and support test. The article describes each test in detail. For example:
To qualify as a dependent, income cannot exceed the personal exemption amount, which in 2019 was $4,200 ($4,300 in 2020). In addition, your parent or relative, if married, cannot file a joint tax return with his or her spouse unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid.
It's possible to claim the child and dependent care credit for work-related expenses paid for the care of a qualifying individual. The credit is generally a percentage of the amount of work-related expenses paid to a care provider for the care of a qualifying individual. The percentage depends on adjusted gross income. Work-related expenses qualifying for the credit are those paid for the care of a qualifying individual to enable an individual to work or actively look for work.
The article goes on to describe scenarios like claiming the medical deduction and even where caregiving responsibilities are shared. For example, if neither caregiver pays more than 50 percent, it's necessary to fill out IRS Form 2120, Multiple Support Declaration, as long as the filer and their applicant provide at least 10 percent of the support towards taking care of a parent.
The tax rules for claiming an elderly parent or relative are complex. But for those who have questions, US Tax Professionals in Vancouver are just a quick phone call away. Call (604) 281-3318 to get started.
About US Tax Professionals
US Tax Professionals provide tax services for dual American and Canadian citizens in Vancouver. Founded in 2013, they specialize in taxation for US citizens and expats, taxation and accounting for business, cross-border taxation for US and Canadian citizens, as well as accounting and taxation of alternative investments, including private equity funds and hedge funds.
For more information, visit https://us-taxprofessionals.com/ or call (604) 281-3318.
US Tax Professionals
Company Website: https://us-taxprofessionals.com/