If you can satisfy a few tests imposed by the Internal Revenue Service, you’re allowed to claim your mother as a dependent. Dependents lower your taxable income. This allows you to keep more of your earnings to invest for the future when you’re Mom’s age. In addition, if you’re single, having Mom as a dependent qualifies you for a filing status with lower tax rates. Mom can be your dependent regardless of whether she lives with you.
Claiming your mom as a dependent is only possible if her annual income is less than an amount established yearly by the Internal Revenue Service. For 2012 tax returns, that amount is $3,800. This figure is adjusted annually for cost of living. Total Mom’s income from all sources that are not exempt from federal tax, including unemployment benefits. Exclude Social Security benefits from the calculation. If Mom has a rental property, count only the gross rent received without deducting any expenses.
The key reason you’re allowed to claim Mom as a dependent is that you provide most of her support. Make sure you pay more than half the cost for her food, lodging, clothing, medical care, education, health insurance premiums, transportation, and recreation. Also include large purchases, such as furniture, appliances, and automobiles. If Mom doesn’t pay any rent for lodging you provide, use a value that is the amount you would charge a stranger for the same lodging.
You can possibly claim Mom as a dependent even if you don’t provide half of her support by yourself, but have an arrangement with someone else to jointly provide half of Mom’s support. As long as your share is at least 10 percent of Mom’s support, you’re allowed to claim her as a dependent. But, the catch is that the other people providing half of Mom’s support with you must agree in writing. The IRS requires attachment of Form 2120 to your tax return. This is a Multiple Support Declaration identifying the other people who provide more than half of your mother's support with you. The form confirms their acceptance of your claim for your mother as your dependent.
Head of Household
If you’re unmarried and your mother qualifies as your dependent, you can use a tax filing status called Head of Household. The tax rates are lower than filing as single, which is your status if you’re unmarried without dependents. So, you capture another tax break in addition to claiming the dependency exemption for Mom. To qualify for Head of Household, you must pay more than half the cost of keeping up a home you share with Mom. If your mother lives apart from you, filing as Head of Household is still permitted if you pay half the cost of keeping up the home occupied by Mom. This includes the cost of a retirement or nursing-care facility.
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