Tax Season 2022: Filing Requirements, Status and Dependents
If you have a family, you need to know how the IRS defines “dependents” for income tax purposes. This is very important because it could save you and your family thousands of dollars on your taxes.
There are two types of dependents, each subject to different rules:
- A qualifying child
- A qualifying relative
Claiming your child as your dependent
To claim your child as your dependent, according to the IRS, your child must meet either the qualifying child test or the qualifying relative test.
To meet the qualifying child test, your child must be younger than you and either younger than 19 years old or be a “student” younger than 24 years old as of the end of the calendar year,” explains Daniel Ahart, chief tax officer at the tax preparation company Daniel Ahart Tax Service®
There’s no age limit if your child is “permanently and totally disabled” or meets the qualifying relative test.
Additional requirements:
In addition to meeting the qualifying child or qualifying relative test, you can claim that person as a dependent only if these three tests are met:
- Dependent taxpayer test
- Citizen or resident test, and
- Joint return test
In a nutshell, if you can claim someone as a dependent, certain deductions you can get will lower the amount of income you can be taxed on. If you qualify for a tax credit related to having a dependent, your tax liability will shrink and you may even be able to redeem the credit for a tax refund. So contact Daniel Ahart Tax Service® and more importantly, don’t pay your taxes late.
What Happens If You File Or Pay Your Taxes Late?
Two penalties may apply. One penalty is for filing late and the other is for paying late. They can add up fast. Interest accrues on top of penalties.
- Late-filing penalty. If taxpayers file their 2021 tax return more than 60 days late, the minimum penalty is usually $210. If the tax owed is less than $210, it’s 100 percent of the unpaid tax. Otherwise, the penalty can be as much as 5 percent of the unpaid tax each month up to a maximum of 25 percent. There’s no penalty for filing late, if the taxpayers is due a refund.
- Late-payment penalty. You’ll likely end up owing a late payment penalty of 0.5% per month, or fraction thereof, until the tax is paid. The maximum late payment penalty is 25% of the amount due. You’ll also likely owe interest on whatever amount you didn’t pay by the filing deadline.
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