Rules for claiming dependents
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My life partner and I have been living together for more than five years. She is a full-time student and is not working. I have been depositing money into her checking account so that she can pay for her medical insurance and bills. She has multiple sclerosis, so her medical bills can be significant. Will I be able to claim her as a dependent on my 2008 taxes? Will I be able to claim her medical bills as a deduction on my return? If so, what are the guidelines?
— Emily
The federal government does not recognize cohabitation as a relationship, and we all know how it feels about gay marriage. However, an individual can claim another person as a dependent regardless of relationship if certain criteria are met. 1. Your partner must be a member of your household for the entire year and your relationship must not violate local law. Dependency rules for relatives usually require that the person live with you for more than half of the year. When the dependent is unrelated, the rules require that the dependent live with you from the beginning of the year until the end. Temporary absences are not counted. I don’t know of any case in which the IRS has challenged a dependency exemption on the grounds of local law, and I doubt very much that it would want to get into that issue. 2. The dependent’s gross income must be less than the amount of the dependency exemption. In 2008, the maximum gross income of a dependent other than a child cannot exceed $3,500. 3. You must provide more than half of the dependent’s support. Support includes direct support as well as the value of meals and housing. 4. You cannot claim a person as a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national or a resident of Canada or Mexico, for some part of the year. Medical expenses paid for a dependent are deductible by you as an itemized deduction on Schedule A. You can claim all of the expenses to the extent you provided her support (deposits into her checking account) even though she actually wrote the checks for the expenses. To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Taxpayers should seek professional advice based on their particular circumstances. Related Links: Recovering FICA payments Related Articles: Expenses cut tax bill Report investment income SHARE: George Saenz
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— Emily
The federal government does not recognize cohabitation as a relationship, and we all know how it feels about gay marriage. However, an individual can claim another person as a dependent regardless of relationship if certain criteria are met. 1. Your partner must be a member of your household for the entire year and your relationship must not violate local law. Dependency rules for relatives usually require that the person live with you for more than half of the year. When the dependent is unrelated, the rules require that the dependent live with you from the beginning of the year until the end. Temporary absences are not counted. I don’t know of any case in which the IRS has challenged a dependency exemption on the grounds of local law, and I doubt very much that it would want to get into that issue. 2. The dependent’s gross income must be less than the amount of the dependency exemption. In 2008, the maximum gross income of a dependent other than a child cannot exceed $3,500. 3. You must provide more than half of the dependent’s support. Support includes direct support as well as the value of meals and housing. 4. You cannot claim a person as a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national or a resident of Canada or Mexico, for some part of the year. Medical expenses paid for a dependent are deductible by you as an itemized deduction on Schedule A. You can claim all of the expenses to the extent you provided her support (deposits into her checking account) even though she actually wrote the checks for the expenses. To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Taxpayers should seek professional advice based on their particular circumstances. Related Links: Recovering FICA payments Related Articles: Expenses cut tax bill Report investment income SHARE: George Saenz