Whether you are a U.S. citizen or a foreign resident, you must file a federal income tax return depending on your gross income, filing status, age, and whether you are a dependent.
You are required to file your own tax return even if you owe no tax. Otherwise, you may have to pay the penalty if you didn’t file, but you were supposed to. If you willfully fail to file a return, you may be subject to criminal prosecution.
You may wonder if supporting dependents, such as a disabled or elderly relative or your children, can bring you certain benefits concerning tax returns. It is crucial to keep in mind that such benefits apply only to individuals supporting other people.
Furthermore, if nobody can claim you as a tax dependent, there are some tax deductions and credits that you are eligible to claim for yourself.
Determining whether someone is eligible as a tax dependent can be confusing, and we explain everything you need to know in the article below:
What You Must Know About Tax Return
Tax returns are official forms filed with a tax authority, such as the Internal Revenue Service (IRS) or the state or local tax collection agency. When filing tax returns, taxpayers can calculate their liability, request refunds, and schedule tax payments.
Typically, a tax return begins with the taxpayer providing personal information, including filing status and dependent information. The three main sections of a tax return are:
- Tax credits
In the income section, all sources of income are listed. The taxpayer must report dividends, self-employment income, wages, and capital gains in this section. A W-2 form that the employer submits is the method of filing an income tax return that is most frequently used.
Taxpayers may use a standard deduction for their status, or they may use itemized deductions. It is important to note that you can use only one type of deduction.
A tax credit is an amount of money that can be subtracted from the taxes owed to the government. In other words, a tax credit reduces the actual amount of the tax owed. Usually, credits are ascribed to the care of dependents, pensions, education, etc.
The federal individual income tax has seven tax rates, the lowest being 10% and the highest marginal rate being 37%. Marginal tax rates and tax brackets apply only to taxable income.
Taxable income is the portion of an individual’s or a company’s income that they owe to the government in a tax year.
Taxable income is easily calculated by subtracting deductions from the adjusted gross income (AGI). AGI includes earned income (wages, tips, salary, etc.) and unearned income (interest earned on investments, dividends, royalties, and gambling).
Understanding the basics of taxes and taxable income allows you to know whether you can claim dependent exemptions for yourself, your parents, and other members of your family.
What Is a Dependent and What Is Personal Exemption?
Two terms you will see a lot of in this article: dependent and personal exemption. So, before we proceed, we’ll quickly explain what they mean.
A dependent is a person other than the taxpayer or spouse who entitles the taxpayer to claim a dependency exemption.
The personal exemption is the amount of money you can deduct for yourself, no matter what. It is available to all taxpayers, but if someone else has you listed as a dependent, you cannot get a personal exemption.
Can You Claim Yourself as a Dependent?
To answer the question, you CAN’T claim yourself as a dependent. However, there are some tax benefits if nobody is able to claim you as their dependent. In that case, certain tax benefits will go to you rather than to the person taking care of your needs.
2017 Tax Reform Suspended Personal and Dependent Exemptions by 2025
Through 2017, the most common benefit of filing taxes on your own was claiming the personal exemption. A personal exemption is essentially a tax deduction used to reduce the amount of your income that is subject to federal income tax.
In 2017, the personal exemption was $4,050 per person, unless you had a lucrative income.
On Dec. 22, 2017, President Trump signed the Tax Cuts and Jobs Act into law. President Trump’s changes to the tax code are considered the most significant tax changes in the last 30 years, with a substantial impact on both taxpayers and business owners.
In a nutshell, The Tax Cuts and Jobs Act brought several significant changes:
- The law created a lower single corporate tax rate of 21%.
- The Act kept the old structure of seven individual income tax brackets, but the new law lowered the rates in most cases.
- The law raised the standard deduction for joint tax return (from $12,700 to $24,000), for single filers (from $6,350 to $12,000), and heads of household (from $9,350 to $18,000).
- The personal exemption was suspended.
- The law temporarily raised the child tax credit to $2,000, with the first $1,400 refundable, and created a non-refundable $500 credit for non-child dependents.
- The changes not related to earned income tax credit (EITC) expire after 2025.
How Much Are Dependent Exemptions Worth in 2023?
These exemptions vary each year, but in 2023, dependent exemptions are worth $4,400 per person. This means that if you have three dependents, you can deduct $13,200 from your taxable income. There are only two more years until the tax reform is revised or dropped, but we’ll see what happens.
Filing Taxes as a Non-Dependent
Aside from personal deductions, other deductions and credits require that you not be someone’s dependent. The tax benefits for non-dependents can be a standard deduction, or the EITC, providing an economic boost to low-income people. These are only available if you can’t be claimed as someone’s dependent.
Likewise, the American Opportunity Credit and lifetime learning credit to support educational expenses can either go to a student or someone claiming that student as a dependent, but not both.
Either way, all taxpayers look for available tax deductions and credits to either lower their balance or increase their refund. However, if you are filing for your family, a great way to reduce your tax balance is to claim a qualifying dependent.
Who Qualifies as a Tax Dependent?
First and foremost, a tax dependent is someone you support, often a child or a relative, allowing you to claim certain tax deductions and credits.
To claim these benefits, such as head of household filing status, the Child Credit, the EITC, or the Child and Dependent Care Credit, you must have provided at least half of the person’s total financial support for the year. A tax dependent must meet specific requirements to be recognized as a qualified child dependent or a qualified relative dependent.
Qualifying Child Dependent
When you have a qualifying child, several requirements need to be met:
- The child has lived with you for at least half of the tax year.
- The child has to be a part of your family (for example, son, daughter, brother, sister, stepchild, foster child, stepsibling, or a descendant of any mentioned).
- The qualifying child must be 18 years old or younger at the end of the year or 23 or younger if it’s a full-time student. In this instance, the child must have attended school full-time during at least five months of the tax year to be a student.
- The child has to be younger than you or your spouse if married filing jointly, unless the child is permanently disabled, as determined by the doctor.
A qualifying relative can be any age, but to be considered your dependent, the individual must meet the following criteria:
- The individual can’t be someone else’s qualifying dependent.
- The individual has to be related to you (your child, adopted child, stepchild, sibling, nephew, niece, parent or stepparent, grandparent, your in-law, uncle, or aunt).
- The qualifying relative lived with you during the whole tax year.
If the individual isn’t related to you but meets the rest of the requirements, they can be considered your dependent.
When claiming dependents, keep in mind:
- Dependents can have their own returns on taxes and even be married, but they must not have filed a joint return for the year unless it’s just to claim a refund.
- The dependent must be a U.S. citizen, U.S. national, a resident alien, or a resident of Canada or Mexico. If they are a resident of Canada or Mexico, they must have a Social Security number and meet all other qualifications.
- If a person died at any time during the year but lived with you as a member of your household, they are considered to have lived with you for the entire year. If a child was born at any time during the year and has lived with you as a member of your household for the rest of the year, they are also considered to have lived with you all year.
- They must have a taxpayer identification number, usually a Social Security Number, but it can also be an Individual Taxpayer Identification Number (ITIN) or an Adoption Taxpayer Identification Number (ATIN).
- The person must have made less than $4,400 in gross income during 2023.
Other Common Questions About Claiming Someone Dependent
There are several more questions people often have when they want to claim dependents or a personal exemption.
Can I Claim My Spouse as a Dependent?
You cannot claim your spouse as a dependent, whether you live together or separately. In spite of that, you can claim an exemption for your spouse in several circumstances:
- If you file jointly, you can claim an exemption for your spouse.
- If you file separately, to be eligible for her to get a personal exemption, she must not have gross income, isn’t filing a tax return or isn’t dependent on another taxpayer.
Claiming Parents as Dependents
Parents claiming you are a dependent isn’t uncommon, and there are definitely situations in which this is OK to do. If you are dependent on your parent’s dependent, they get certain benefits, but you do not qualify for those benefits. Also, if you are earning money, you’ll need to file a tax return by the end of each tax season.
On the other hand, they can choose not to claim you as a dependent, in which case you can get education credits. The education credits can cover your expenses related to schooling, which may be more valuable for you (especially if you are a graduate student) than having your parents claim you on their tax return.
Can Both Parents Claim the Same Child
Only one parent can claim a child. According to the information on the IRS website, if both parents claim a child, they will allow only one claim, and that’s the one from a parent who has been living with the child for longer.
Who Can’t Be Eligible as a Tax Dependent?
It’s important to emphasize who can’t be counted as your tax dependent:
- A married person who files a joint return (there are some notable exceptions to this, for all the details, check IRS Publication 501)
- A person who is not a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico (there are exceptions here for people adopting children)
- People who work for you
- Foreign exchange students
Get Tax Benefits and Personal Exemption by Claiming a Dependent
Five years ago, claiming a dependent on your tax return would get you a personal exemption.
As we already said, under the Tax Cuts and Jobs Act of 2017, claiming a personal exemption for yourself, your spouse, or your dependents is no longer an option. However, whether you qualify or not, claiming a dependent is going to get you the following benefits:
The Child Tax Credit and Credit for Other Dependents
This credit is worth up to $3,600 per qualifying child dependent under six and up to $3,000 per qualifying dependent child 17 or younger. A non-child dependent will get you $500 in credit per dependent.
Head of Household Filing Status
Head of household filing status will entitle you to a higher standard deduction and more advantageous brackets than if you filed your tax return as a single person.
Child and Dependent Care Tax Credit
You can claim this credit on the federal tax return (Form 1040 or 1040-SR) that you file by Oct. 16, 2023, with a tax extension. You’ll also need to fill out Schedule 8812 (“Credits for Qualifying Children and Other Dependents”), which is submitted with your 1040.
Compared to the last few years, there have been some changes for the period between 2022 and 2025. With the 2021 ARPA enhancements ending, the credit will revert back to the rules established by the TCJA, including the $2,000 cap for each qualifying child.
Make sure you don’t make any errors on your tax form because your tax refund can be delayed or rejected. If the claim is erroneous, you can even receive a penalty, which puts you in a worse spot.
Earned Income Credit
In the tax year 2023 (taxes you claim in 2024), depending on how many kids you have, how much you make, and your marital status, an earned income credit would get you between $600 and $7,430. For the tax year 2022 (taxes you claim in 2023), depending on the tax-filing situation and number of children, this credit ranges from $560 to $6,935.
Check out the maximum amounts for this year below:
The adoption credit is used to cover up to $15,950 per adopted child for adoptions finalized in 2023 and returns claimed in 2024. In 2022, the IRS raised the adoption credit to $14,890.
Remember that you can’t take the adoption credit if you’re adopting your spouse’s child.
Furthermore, people who adopt children with functional needs can get full credit even if the adoption costs are lower.
Knowing all this, we’ll help you file your federal taxes.
How To File Your Federal Taxes
There are a wide variety of different forms available:
- W-2 form from your employer, detailing which taxes were withheld and your earnings
- Form 1099-NEC to report nonemployee compensation if you’re working freelance or on a contract
- Form 1099-DIV or Form 1099-INT reporting if you have any dividends or interest earned on investments.
- Form 1098-E reporting a student loan interest you’ve paid
- If you’re a college student (or you have a dependent who is a college student), you’re going to receive a Form 1098-T, reporting how much you paid in tuition, as well as any amounts you received from grants or fellowships. This form will also help you figure out available credits and deductions related to education expenses.
Don’t forget to file your taxes on time.
Choose How To File Taxes
Nowadays, the easiest way to file your taxes is electronically. There are many tax preparation programs on the market that are easy to use, affordable, and accurate. The most popular tax filing software packages allowing you to e-file are the IRS Free File program, TurboTax, FreeTaxUSA, and Credit Karma Tax.
However, if you feel like your situation is a bit more complicated, and you need help from an expert, you should consult a tax preparation firm or an accountant. The IRS has a directory of certified tax preparers that are trustworthy.
Check Eligibility for Tax Credits and Deductions
Always look for available tax advantages that you can claim, thus lowering your overall tax bills.
Improve Your Finances With Lifestyle Banking and Don’t Worry About Claiming Yourself as Dependent
The biggest reason people want to claim themselves as dependents is to get benefits and save some extra money on taxes. This is completely understandable, and if you can claim a personal exemption by becoming someone’s dependent and it works for both you and the taxpayer, go for it.
But as you can see, everyone who’s paying taxes and has some income can no longer get a personal exemption. We’ll see if this changes after 2025.
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