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Question for the Money Doctors

Question submitted on Jan 31, 2013.

Question

I am a single employed individual in my mid 20s. For the last year, I have paid for my mother''s rent in the last year. In order to do this, I have deferred my student loan payments. She lives in another state, with my sibling, who is still a minor. How I can file my taxes to reflect this contribution, or where can I seek further tax advice on this issue?

Answer

You may be able to qualify with the IRS (and perhaps your state) for tax incentives. I don't know enough about your facts to give you a definitive answer, but please contact (www.findacpapfs.org) a CPA/PFS near you to coordinate the benefits between your income tax return and your Mother's tax return. Mention your facts and look into your ability to take an exemption for both your mother and your sibling under the qualified relative rules, which don't require that you live with your Mother or sibling. Please note that your Mother and sibling may not also claim themselves as exemptions on their own income tax returns, but it sounds like they don't have a significant source of taxable income, and therefore wouldn't benefit from their tax exemptions anyway. Please also look into available financial solutions for your Mother so that you can focus your attention on repaying your student loans.


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