Personal and Dependency Exemptions

Question 1

Can dependents claim personal exemptions?

Answer 1

-No

Question 2

When are tests for dependency exemption applied?

Answer 2

-Last day of tax year or last day taxpayer was alive

Question 3

What are the two ways to qualify as a dependent?

Answer 3

-As a qualifying child or a qualifying relative

Question 4

What are the tests for a qualifying child?

Answer 4

• Citizen/residency: Must be citizen of US or resident of US, Canada, or Mexico
• Not self supporting: Can’t provide over 50% of own support
• Other
• Relationship: Must be child, sibling, or descendant of these
• Residence: Must live w/ taxpayer more than half the year
• Age: Under 19 or under 24 and full time student at least 5 months, younger than taxpayer, unless permanently disabled
• Joint return: Dependent cannot file MFJ unless only to obtain refund and not required to file according to gross income level

Question 5

What are the tests for a qualifying relative?

Answer 5

• Includes all relatives except cousins or anybody who lives in taxpayers home entire year
• Support: Taxpayer must provide more than 50% of dependent’s total support
• Joint return test: same as qualifying child
• Citizen/residency: same as above
• Gross income test: Dependent’s gross income must be less than exemption amount ($4,000) and only taxable income included for this test (exceptions for child under 19 or under 24 and full time student at least 5 months)

Question 6

Can dependents claim others as dependents? Remember dependents SS# must be included on return for exemption to be claimed

Answer 6

-No

Question 7

How are total exemptions phased out for high AGI taxpayers?

Answer 7

-At 2% for each $2,500 increment above the trigger AGI