TITLE

Caring for Elderly Relatives: Using the Tax Laws to Save the Most for a Family

AUTHOR(S)
Welch, Julie A.; Gardner, Randy
PUB. DATE
June 2003
SOURCE
Journal of Financial Planning;Jun2003, Vol. 16 Issue 6, p28
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This article outlines several guidelines for people in the U.S. who support elderly relatives in gaining tax savings. A taxpayer can usually claim an exemption deduction for himself, a spouse, and dependents. Although tax savings may seem small, they are more than ten percent of the total tax for married couples and heads of household with $40,000 of taxable income. To claim someone as dependent, five tests must be met: support, relationship, gross income, married filing jointly and citizenship. The taxpayer must provide over half the support of the dependent. The dependent must be someone who is related to the taxpayer or someone who lived with the taxpayer the entire year. An older dependent generally cannot have income of more than $3,050 in 2003. A taxpayer cannot file an exemption deduction for someone who files a joint return with his spouse. The dependent must be a citizen or resident of the U.S. or a resident of Mexico or Canada. A family, through planning, can give the exemption deduction to the family member who will receive the most tax savings from the deduction. In some situations, the tax benefit of the exemption can be salvaged by using a multiple support agreement to designate one person as the provider of over half of the support.
ACCESSION #
9999431

 

Related Articles

  • Plan for 2007 -- don't file this tax knowledge away. Kinney, Derrick // Fort Worth Business Press;5/7/2007, Vol. 20 Issue 19, p17 

    The article offers advice on tax planning in the U.S. for 2007. It suggests to periodically review tax exemptions and claim the number of exemptions that will result in withholding as close to what one owes in taxes as possible. It mentions the items that may be carried over to later years if...

  • VALUING A DEPENDENCY EXEMPTION. Franklin, Scott B. // Family Advocate;Fall2002, Vol. 25 Issue 2, p4 

    This article focuses on dependency tax exemption in the U.S. The primary benefit of a dependency exemption is that it reduces taxable income by a specific dollar amount, resulting in a tax savings based on the parent's tax bracket. In addition to the reduction in taxable income, a dependency...

  • New Tax Incentive Benefits U.S. Production Activity. Conjura, Carol; Vance, Scott // Financial Executive;Nov2005, Vol. 21 Issue 9, p60 

    The article discusses the annual, recurring benefit provided in Section 199 of the American Jobs Creation Act of 2004. The provision allows firms to obtain a special income tax deduction calculated on the basis of net income attributable to specified production and other activities conducted in...

  • Private Health Insurance: Estimates of Expanded Tax Deductibility of Premiums for Individually Purchased Health Insurance: HEHS-98-190R. Allen, Kathryn G. // GAO Reports;6/10/1998, p1 

    Pursuant to a congressional request, GAO provided information on the: (1) potential tax benefit that individuals without employment-based health coverage would receive if the cost of their individually purchased health insurance were fully deductible from their federal income taxes; and (2)...

  • The CRT Tax Trap-Danger Lurking. Lindsay-ochoa, Elizabeth // National Underwriter / Life & Health Financial Services;12/12/2005, Vol. 109 Issue 47, p14 

    This article discusses various issues related to the charitable remainder trusts (CRTs), with specific reference to the danger of losing its tax-exempt status. CRTs provide a donor with an income stream while giving the qualified charity a remainder interest. Thus it proves to be a valuable...

  • Maximizing Clients' 529 Funds. McKinley, Kevin // Registered Rep;Dec2010, Vol. 34 Issue 12, p73 

    The article offers guidelines for maximizing funds from 529 investment plans in the U.S. According to the author, to avoid taxation of 529 account withdrawals, there should be matching qualified educational expenses such as tuition, fees, and books. Moreover , if there are no qualifying expenses...

  • Who Profits by the New Tax Bill? Fitzsimmons, Tom // New Republic;9/6/54, Vol. 131 Issue 10, p12 

    In this article, the author critically evaluates the new U.S. tax bill, introduced by President Dwight David's Administration. This large bill is claimed to remove inequalities and to make the whole thing fairer but critics are disfavoring it. Prior to the President's advocation in favor of this...

  • Specific Deduction Areas: Part 3. Sloan, Chuck // Back Stage East;3/6/2008, Vol. 49 Issue 10, p14 

    The article focuses on three crucial areas of acting-related tax deductions in the U.S., which are auto/travel expenses, entertainment for business and business travel expenses. It is stated that if one uses his own car to pursue an acting career this is likely the largest deduction one can...

  • Strategies to Lower Your Firm's Taxes. Dennis, Karla // Nationalmortgagenews.com;11/11/2014, p2 

    The article shares five tactics that small business owners in the U.S. can use to reduce their tax bill. It details the 12x12 system that presents 12 opportunities to analyze one's tax situation and make adjustments prior to the end of the year. It advises finding easy steps to reduce liability...

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics