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Knocking Out $4,050 on Your Tax Refund is Easier Than You Think

Claiming dependents can add up to sustainable savings on your tax bill.  Learn who you can claim and the rules on how to claim them.

The Internal Revenues Service (IRS) defines a dependent as a person who depends on you for sustainability.

Dependents that can help you save $4,050.00 on your tax return:

  1. Children. Someone that lives with you for more than 6 months, 25-years-old and a student.
  2. Family members with disabilities. Persons living with you for a minimum of six months with mental or physical disabilities and are not capable of caring for themselves.
  3. Spouse. If spouse is unemployed.
  4. Elderly parents. If they meet certain requirements (video).

ALSO RELATED: Free IRS tools for low-income workers (VIDEO)

Turbo Tax suggests this step by step procedure to follow if you meet all the requirements.

Step 1: Fill out form 1040/1040A

Use the 1040 form to do your taxes

Step  2: Provide personal information of dependent

On the first page of your income tax return you need to provide dependent’s complete name, social security number or ITIN and their relationship to you.

Mark the appropriate box and include information on another page if you have more than four dependents.

Step 3: Child tax credit

Evaluate if you are eligible to apply for a child tax credit.  After providing dependent’s personal information, mark off all the boxes that apply for every qualifying child.  If you qualify, you are eligible to receive a credit for every child in your household.

Step 4: Add all dependents

You can request an exemption for each dependent you claim plus, one for you and your spouse.  An exemption is a fixed amount subject to change each year that reduces your taxable income in the same way a deduction does.

In 2017, for example, if the amount of the exemption is $4,050, you multiply that amount by the amount of the exemption you were allowed and enter that total to your tax return.

 

 

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