Facts about Dependents and Exemptions

There are a number of misconceptions related to dependents and claiming a dependent’s exemption on a tax return.  If you have a child or someone else that you are claiming as a dependent, you should review these commonly encountered situations.

• Dependents may be required to file their own tax return. Just because you claim someone as a dependent on your return, it does not mean that they are not required to file their own tax return.  Whether or not a return must be filed depends on several factors, including: the amount of the dependent’s unearned, earned or gross income, his or her marital status, any special taxes he or she owes, and any advance Earned Income Credit payments that was received.

• Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents.  For each exemption, you can deduct $3,650 on your 2009 tax return.  Exemption amounts are reduced for taxpayers whose adjusted gross income is above certain levels, which is determined by your filing status.

• Dependents may not claim an exemption. If you claim someone as a dependent, such as your child, that dependent may not claim a personal exemption on their own tax return.

• Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse.  If you are filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.

• Some people cannot be claimed as your dependent. Generally, you may not claim a married person as a dependent if they file a joint return with their spouse. Also, to claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year. There is an exception to this rule for certain adopted children.

If you have questions related to these issues, please give this office a call for additional information.

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