Question for the Money Doctors

Question submitted on Aug 25, 2021.

Question

I am the sole caretaker for my elderly mother and I responsible for her financially, however she doesnt live with me she lives in her own home, how do I count her as a dependent for taxes?

Answer

There are some detailed rules that determine whether you can claim your mother as a dependent on on your tax return.  Here's a link to a summary of the requirements:  overview_of_the_rules_for_claiming_4012.pdf (irs.gov).  A more detailed explanation of these requirements can be found in IRS Publication 17.  Interestingly, a parent does not need to live with a child to be considered a dependent assuming that the other tests are met.  One of the requirements that can be problematic is that your mother would have to less than $4,300. Fortunately, in most cases this is determined by excluding her Social Security benefits.  Next, you need to determine if you provide more than 50% of her total support for the year.  If you qualify to claim your mother as a dependent, you might be able to file your own tax return as a "Head of Household" which would qualify you for lower tax rates if you currently file as a single person.  And, because she's your parent, she does not have to live for you to take advantage of this rule.  Unfortunately, if you already file a joint return with your spouse filing as a head of household would not produce any advantage. 

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