Dependent deduction on taxes


R

rpilani

Hi guys,

I need some help:
My wife's sister is studying (MBA) and she is staying with
us. We are paying rent, groceries, utilities, books and
tuition for her. She is 23 years old and started school in
August, 2005. Can i claim these expenses as dependent
expenses on my tax form? My deductions are not enough (don't
have mortgage etc.) so i will be taking the standard
deduction on my 1040. My wife and i file married filing
jointly.

Please help.. thanks in advance.
 
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A

Arthur Kamlet

My wife's sister is studying (MBA) and she is staying with
us. We are paying rent, groceries, utilities, books and
tuition for her. She is 23 years old and started school in
August, 2005. Can i claim these expenses as dependent
expenses on my tax form? My deductions are not enough (don't
have mortgage etc.) so i will be taking the standard
deduction on my 1040. My wife and i file married filing
jointly.
If sister's studies were considered to be full time at the
college she attended, and if she lived with you most of the
year, and you paid most of her her household costs, she might
very well meet the definition of a "qualifing child" which can
get you the dependency exemption, and possibly Earned Income
Credit as well.

Once she turns age 24, however, that all stops.

See IRS Publications 501 and 596.

__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
 
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P

Phil Marti

My wife's sister is studying (MBA) and she is staying with
us. We are paying rent, groceries, utilities, books and
tuition for her. She is 23 years old and started school in
August, 2005. Can i claim these expenses as dependent
expenses on my tax form?
Start by determining whether she qualifies as a dependent (IRS
Publication 501). If she does, see Pub 970 for the various
education tax benefits.
 
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A

A.G. Kalman

I need some help:
My wife's sister is studying (MBA) and she is staying with
us. We are paying rent, groceries, utilities, books and
tuition for her. She is 23 years old and started school in
August, 2005. Can i claim these expenses as dependent
expenses on my tax form? My deductions are not enough (don't
have mortgage etc.) so i will be taking the standard
deduction on my 1040. My wife and i file married filing
jointly.
Not enough facts in evidence to provide a firm answer. The
student may be the qualifying child of her mother (your
sister-in-law) for purposes of the dependency exemption. She
would be the qualifying child of her mother if she was a
full time student in any part of five months (aug - Dec) AND
she lived with her mother with the time spent with you
treated as merely a temporary absence to attend school AND
she was not providing more than half of her own support.
Under these conditions she could not be your dependent as
she fails the test for being a qualifying relative. On the
other hand, if she was not the qualifying child of her
mother, then she could be your qualifying relative for the
dependency exemption if her income was less than $3200 and
you provided more than half of her total support. If she is
your dependent then you should read IRS Pub 970 on higher
educational tax benefits as you may be eligible for either
the Lifetime Learning Credit or the Tuition & Fees
Deduction.
 
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R

rpilani

Hi Guys, Thanks for all the information.
Just to add some more details:

1. She has been a full time student.(she is an international
student from India)
2. Her income was less than 3200
3. She has been living with us all the time and has not paid
for anything.
4. Her parents are not claiming her as a dependent.
 
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P

Phil Marti

1. She has been a full time student.(she is an international
student from India)
This is a possible snag. A dependent must be a citizen or
resident of the US, Canada or Mexico. Residency is not mere
physical presence. The question is whether her student visa
confers residency status.
 
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A

A.G. Kalman

1. She has been a full time student.(she is an international
This is a possible snag. A dependent must be a citizen or
resident of the US, Canada or Mexico. Residency is not mere
physical presence. The question is whether her student visa
confers residency status.
If she is holding an F or J visa as an international student
she is an exempt individual. As such, she is a nonresident
alien and therefore fails the dependency test.

As an aside: for those posting questions, please provide all
the facts up front rather than in dribs and drabs.
 
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