What Tax Exemptions are Available for my Family and Dependents?

Tax benefits abound for families.

Through exemptions and credits for children and other dependents, deductions that can be taken for every member of a household, and other nuances in the tax code, the tax status of a family is at a significant advantage over the tax status of a single individual. Many families wonder what tax exemptions areavailable for families with dependents.

“Exemptions” are amounts deducted from your taxable income, apart from any expenses or other deductible activity. They are granted solely based on the status of the taxpayer, i.e. parent, person over age 65 or with physical disabilities, etc.

For 2008, there is a $3,400 exemption for each qualifying child, who lives in your home more than half the year and is under the age of 19, or is a full-time student and under the age of 24. These exemptions will increase to $3,500 in 2008.

Dependent exemptions may also be claimed for anyone who is:

There are difficult questions that arise concerning the dependency of an individual, particularly around the question of whether a person is a “relative”. The following people are considered to be relatives:

Most important in all these rules is that the same person cannot be claimed as a dependent by more than one taxpayer, nor can a child who can be claimed as a dependent on his or her parents’ return claim a personal exemption on his or her own return. You must include the person’s social security number on your return, if one exists so that the IRS can cross check and make sure the exemption is only taken on one return. Learn more about tax exemptions for families with dependents.

Are you missing out on deductions you deserve to claim? Use TurboTax Online to help identify over 350 tax credits and deductions available and which ones you are eligible for.

More on birthday gifts for her:

1. How to Calculate Federal Income Tax Federal Income tax is calculated based on the formulas...
2. Child Care Tax Credit and Dependent Care Credit Do You Qualify For Child Care Tax Credit Or Dependent...
3. IRS Audit IRS Audit If you received an IRS audit letter, you...
4. Best Income Tax Preparation Software for 2009, 2010 There are thousands of tax preparation services available online that...
5. New Windows Tax Deduction for 2009, 2010 You may be eligible for a federal tax deduction if...