January 08th, 2016

TAX TIP OF THE DAY... deduct your Dad

Dependency rules have radically changed over the years.  So ignore your prior knowledge in this area.  If you support a parent, it may be possible to claim that parent even if they don't live with you.  A good candidate for this deduction is a parent on social security with no more than $4k of additional income.  The rules are a bit tricky to navigate.  But it's a great deduction that may even extend to Head of Household benefits for certain children.   There are planning opportunities based upon which parental living expenses you choose to pay for.

Myth #1: you can only claim children as dependents
Myth #2: you always must live in the same house as your dependent


SHARE WITH A FRIEND. 
If you need any help... www.baboiancpa.com