If you don’t want to enact your own version of the classic soul song “Somebody’s Watching Me” where you envision the IRS watching you from day to day, get wise to which tax filing rules apply to you. You don't have to be a qualifying child dependent or an invalid relative to be claimed on someone else's taxes.
While it's true that the young and the elderly are normally associated with dependent status, it's not unusual for adults to fall in this bracket as well. After all, college students and couples often live on a single income. As nice as it would be to have an immediate get-out-of-tax-time-free card, being a dependent doesn't necessarily exempt you from tax obligations. The filing requirements for dependents vary, and certain circumstances make it necessary for a dependent to file.
You May Need To File a Dependent Tax Return
The income of the dependent is the most crucial factor. There are variable levels of income requirements to be claimed as a dependent in the first place. In any case, a dependent may not exceed the standard deduction allowed to all taxpayers. For 2018 taxes, that's $12,500. For 2017 taxes, that would be $6,350. For 2016 taxes, it was $6,300. Earned income includes not just salaries, wages or tips, but also taxable scholarships and grants. Unearned income, which includes interest, dividends, capital gains, annuities, unemployment and trust income, has a cap of $1,050 for most dependents, after which they must file a return.
So, if I am a dependent, do I file taxes? Well, whether you've been claimed as a dependent, you still file if you fall into a group with special tax considerations. If you owe an alternative minimum tax, taxes on an IRA, taxes on any wages you earned that didn't have Social Security or Medicare deducted, write-in taxes or household employment taxes, you must file.
Another thing that can muck a bit with your requirements to file is your age and marital status. You don't have to worry about it much if you're over 65 and going blind; the IRS cuts a little slack on the disabled elderly for dependent filing requirements. They really aren't crazy about married folks skipping filing, though. If your spouse files separately with itemized deductions and you made at least five bucks, you need to file whether you are someone else’s dependent or not.
When You Don't Need To
If it’s not necessary to file a dependent tax return in your situation, it may still be in your best interests to do so. For example, tax refunds are only sent to people who file a tax return. If you don't file and are owed money, don’t expect to receive the refund. This only applies if you earned money where federal taxes were withheld in the past year. If you don't earn more than the standard deduction, the federal taxes you paid are owed back to you. You might also qualify for certain tax credits that can increase your refund beyond the total of taxes that were withheld.
For 2018 Tax Filers
For those filing their taxes for 2018, you will need to check the latest income requirements for dependents filing tax returns here. The rules haven't changed from previous years if you're a dependent claimed on someone else's taxes. But standard deduction rates have changed, so if that factors into your decision to file, you'll want to consider that. Also, if you do file and are deducting, the maximum amount you can deduct for student loans is also the same, $2,500.
For 2017 Tax Filers
For those filing for 2017, dependents need to file if your taxes if you earned over $6,350 in earned income and $1,050 unearned income, if you're single or married, under 65 and not blind. The minimum self employment income for any dependent is $400.
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- Can You Be Claimed as a Dependent for Tax Returns if You Are 18 Years & Above?
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