Americas baby boomer generation currently has a lot on its plate. How about some tax relief during tax season, which is currently in full swing as the clock ticks towards the IRS filing deadline of April 15.
Not only are baby boomers taking care of their parents, but now the kids are staying home longer. Naturally, the Latino community has always embraced the multigenerational family model. In fact, studies show 10.3 percent of Latino homes are multigenerational, compared to 3.7 percent of non-Hispanic white households.
Overall, more than 51 million Americans live in homes with more than two generations.
H&R Block Tax Advisor Annabella Dalzin Rodriguez tells VOXXI that in regards to tax filing, this is an advantageous scenario that is often overlooked by her customers.
One of the questions you want to ask when youre preparing a tax return is who else is living in the house with you and who else do you provide support along the year, Rodriguez said. Then based on that question, you start digging a little more and try to find if the taxpayer is the one who is paying those expenses and providing that care.
Eligible dependents for tax purposes
Specifically, taxpayers who have qualifying children or support other family members may qualify to claim them as a $3,900 exemption per dependent.
There are a lot of people who dont know what tax benefits they can take advantage of, said Rodriguez, who estimates more than 60 percent of her clients are Latino in the Weston, Florida area. They need to determine if they qualify or the person theyre taking care of qualifies to be a dependent of them. There are benefits where they can apply dependent care credit also available to them. Plus, of course they can claim an exemption for the tax return, which is also a tax break.
In order to claim parents as qualifying relatives, they are not required to live with the taxpayer. That is, the taxpayers must pay more than half of specific support expenses to claim the exemption for parents. In addition, if a non-relative was living in the home all year long, they too could be claim the exemption.
The [senior] can’t make more than $3,900 a year, and social security is not taxable, Rodriguez said. It is important that if that person is going to file a tax return, that tax return is just to claim taxes withheld under $3,900. And the taxpayer must provide them with more than 50 percent of their support food, lodging, clothing, medical, dental, transportation, etc.
When it comes to offspring, taxpayers may be able to claim their children as dependents if they are under 19 or a fulltime student and under 24.
They have to live there at least half the year, Rodriguez said.
Also, the taxpayer does not have to support the child, but the child must meet other qualifications, including citizenship status.