What is a Dependent?
A dependent relies on someone else for most or all of his or her financial support.
How Does a Dependent Work?
In general, dependents are exemptions that reduce a taxpayer's taxable income. Taxpayers typically can take an exemption for each of his or her dependents. Spouses are not considered dependents from a tax perspective.
To claim someone as a dependent, the dependent must be a U.S. citizen, a U.S. resident alien, a U.S. national resident, or a resident of Canada or Mexico for some part of the year. Adopted children have some special exceptions to this rule. The filer must provide Social Security numbers for all dependents.
People who are dependents on another person's tax return may still have to file their own tax returns. This depends on how much they earn, how old they are and other factors. Dependents cannot claim any personal exemptions on their tax returns.
Why Does a Dependent Matter?
The presence and number of dependents affect a taxpayer's tax liabilities and eligibility for public assistance programs such as welfare and food stamps. As mentioned, dependents increase the number of exemptions a taxypayer receives.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
Stocks can be put into various categories in order to make it easier to identify them. Although there are a number of classifications, some...
Read More →
For most of us, the stress of tax season is so overwhelming that we put it off until we just can't...
Read More →
What if you could receive regular income without getting a second job or selling some of your assets? Regular passive income is among...
Read More →
What does it take to become ranked as a top woman of finance? Pretty much the same thing it takes for a man: knowledge, competence, creativity, perseverance and maybe a little luck thrown...
Read More →
