Video: How to File a Tax Return with Adult Dependents

 

The article below is accurate for your 2017 taxes, the one that you file this year by the April 2018 deadline, including a few retroactive changes due to the passing of tax reform. Some tax information below will change next year for your 2018 taxes, but won’t impact you this year. Learn more about tax reform here.

 

Video transcript:

Hello, I’m Jill from TurboTax, with information about claiming exemptions for adult dependents on your tax return. Did you know that reporting an adult dependent on your return provides the same tax savings as reporting your children?

When claiming an adult as your dependent, there are four essential tests you must satisfy. The first test requires that you be ineligible to report the person as your qualifying child. However, all individuals who are older than 23, or older than 18 and not attending school full-time, can never be a qualifying child. One exception exists for your adult children, stepchildren, foster children, siblings, including half and stepsiblings, and any of their descendants, who are permanently and totally disabled. Regardless of their age, these individuals can be a qualifying child.

The next test requires that the adult reside with you for the entire tax year. There are, however, certain family members who don’t need to live with you to qualify as your dependent. These include your adult children, foster children and stepchildren, as well as their descendants such as your grandchildren. Also eligible are your siblings, stepsiblings, half siblings, parents, grandparents, stepparents, nieces, nephews and even your great aunts, uncles and some of your in-laws.

You must also consider the person’s gross income in the year you want to claim their exemption. This is because you can’t claim an adult dependent if their gross income—which is the total of all income that isn’t tax-exempt—is $3,700 ($4,050 in 2017) or more. And lastly, you must provide more than half of the necessary financial support for the adult. When calculating your level of financial support, include the lodging, food, home repairs, clothing, educational, medical, travel and recreation expenses you pay for.

When you are eligible to claim a dependent, you must prepare your tax return on a 1040 or 1040A form and report each dependent’s name, Social Security number and your relationship to them. And for each dependent you report, you can reduce your taxable income by one exemption—which ultimately reduces your tax bill for the year.

Not sure who qualifies as your dependent? When you file with TurboTax, we’ll ask you simple questions about the people you financially support and we’ll determine who qualifies as your dependent. For more information about income taxes visit TurboTax.com.