Being a Caregiver is a pretty tricky job that could also take its toll on your pocket. It is like being responsible for someone's well being, hence everything the person needs is on you.
In a bid to make life easier for these groups of people, the IRS came up with tax benefits. Although it might not do much for the emotional side, it can cushion the financial blow. Here are four tax credit you can claim
Child Tax Credit
For people with dependent children, the Child Tax Credit was increased to $2000. This comes per dependent child under 17. Many families can now qualify with a single filer of income eligibility $200,000 and married filing jointly of $400,000
The IRS defines a dependent as someone in which more than half of their care and support expenses are on you in a year. Children are a perfect fit for this bill. Other family members and senior parents are also included.
If you support someone that is not your child (under 17 years), the Tax reform provided a new credit for up to $500. This is credit for other dependents, and you can claim it provided the dependents to meet the following criteria.
They must be a U.S. national, citizens, or resident alien with a valid means of identification. This means they need either a social security number, Adoption Taxpayer Identification Number. Or Individual tax identification number.
People with a gross income of less than $4,200 for 2019 tax year
Half of your dependent's living expenses are on you. Such payments are clothing, housing, transportation, food, and medical costs.
Relatives do not have to live with you, but non-relatives must live with you.
Finally, no one can claim you as a dependent on their tax return.
Child and Dependent Care Credit
This is a credit that parents use to take care of a dependent or child's expenses and care, which allows you to work or look for work. Many parents use this to pay for their kid's childcare and other dependent's expenses.
Parents can enjoy as much as $1050 for one child less than 13 (no age limit for disabled) and $2100 for two or more kids under 13.
For a dependent, that is your spouse, it is essential that they cannot take care of themselves physically and mentally and must have lived with you for more than half of the year. Also, any of the following must apply:
Was your dependent
Might have been your dependent, but they got a gross income of $4,200 or more. They could also have filed a joint return or claimed a dependent on someone else's 2019 tax return.
Head of Household Status
For single taxpayers, there is the possibility of filing with the head of the household status if there is a dependence on catering. This is extra tax saving as the standard deduction for the head of household is way more than what you will get if you are filing as single.
For instance, in 2019, the standard deduction filing status was $12,200, while the head of households had up to $18,350.
Unreimbursed Medical Expenses
If any of your dependents have unreimbursed medical expenses, there is the possibility of deducting them from taxes. The same rule applies when you want to deduct your unreimbursed medical expenses. For people with qualified medical expenses over the 7.5% of the adjusted gross income, itemizing your deduction allows you deduct.
