By adding qualified dependents to your tax return 2012 – 2013, you decrease the amount of income tax that you owe. Just by taking benefit of the Internal Revenue Service rule that allows you to comprise on your return qualified dependents, you could considerably increase your refund. Several tests determine if a child or grandchild qualifies as your dependent.
When you maintain a dependent on your income tax return you claim that person’s release. Each exemption you claim reduces your payable earnings by a specified amount. For tax year 2012, the exemption amount per dependent was $3,650.
The child tax credit 2012 – 20913 allows you to decrease your income tax by $1,000 for each child you maintain on your return under the age of 17. To be eligible for the credit, your granddaughter must meet the support, relationship, age, citizenship, and dependent and nationality test. This means that you must offer the greater part of support for your granddaughter, she must also be a citizen, under 17, related to you, and must have lived with you for the bulk of the tax year.
The child tax credit begins to phase out for taxpayers whose (AGI) adjusted gross income surpasses a certain amount. For joint filers, the phase-out begins at $110,000, $55,000 for separate filers and $75,000 for individual filers. In adding, the child tax credit is a nonrefundable credit. This means that the amount for you get in a straight line correlates to the amount of income tax you owe.
You cannot claim your granddaughter if an important person else can claim her or if she plans to claim herself. 2 people cannot claim the same immunity. If two populace do claim the same exemption, this could trigger an Internal Revenue Service audit. But this doesn’t mean that you and your granddaughter cannot both file a return. It just means that if you file your granddaughter’s exemption on your return, she must maintain zero exemptions on her return.