Tax Tips BlogTax Tips for Individuals and Small Businesses

There are 5 requirements that must be met for an individual to be considered a qualifying child.

1. 1.     Relationship.  The child must be:
   1. Your child, stepchild, adopted child, foster child, or a descendant of any of them (grandchild); or
   2. Brother, sister, step-brother, step sister, half-brother, half-sister, or a descendant or any of them (niece/nephew)

Also include in this group adopted and foster children.  An adopted child includes any child lawfully placed with the taxpayer for legal adoption.  A foster child is any child placed with the taxpayer by an authorized placement agency or by a judgment or decree issued by a court.

1. 2.     Residency.  The individual has to have resided with the taxpayer for more than 6 months of the tax year and must be the qualifying child’s principal home.  Temporary absences for illness, education, business, vacation, or military service may count as time lived with the taxpayer.

 If a child who is born/dies during the tax year will be considered as living with the taxpayer for the entire year if the taxpayers home was the child’s home for the time the child was alive.

If a child is presumed by law enforcement authorities to be kidnapped by someone who is not a member of the family and the child resided with you more than 6 months of the prior tax year, then the child satisfies the residency test for all years ending during the period in which the child is missing.  The child ceases to satisfy residency the year beginning after the calendar year the child is determined dead or if the child turns 18.

1. 3.     Age Requirement.  The child must be:
   1. Under age 19 at the end of the calendar year
   2. Under the age of 24 at the end of the calendar year and a full time student for at least 5 month of the year
   3. Permanently & totally disabled at any time during the calendar year regardless of age.

To meet the age test and not be disabled, the individual must be younger than the taxpayer/spouse if married filing jointly (individual does not have to be younger than both just younger than one of the married taxpayers)

1. 4.     Support.  An individual must NOT provide over 1/2 their own support during the year to be a qualifying child.  A scholarship received by a child that is a full time student is not considered support.
2. 5.     Joint Return.  An individual CANNOT be a qualifying child of another taxpayer if they file a joint return with his/her spouse for the year unless the joint return is filed solely as a claim for refund.

I hope the information above has clarified if you can claim a child placed in your care or away at college.  If you have other tax questions please feel free to shoot me an email at tami@highbaughtax.com or ask your question in the comments section below.

Wondering if you are required to file taxes in 2011.  You may not have to… So who must file a Return in 2011?  The information below should help you figure it out.

You must file a return if you are a U.S Citizen or Resident Alien and have gross income that is more than the amounts show below in the table.  There are some exceptions though… for instance you must file a return:

• If you had net earnings from self employment of at least $400.00
• If you received any advance earned income credit (EIC) payments from your employer
• If you had wages of $108.28 or more from a religious organization that is exempt from Social Security and Medicare Taxes

Also if you owe any of the following special taxes:

• Social Security & Medicare taxes on tips not reported to your employer
• Uncollected Social Security, Medicare or railroad retirement tax on tips reported to an employer
• The alternative minimum tax
• Household employment taxes
• Additional tax on a qualified retirement plan, including an IRA
• Additional tax on a health savings account (HSA), Archer MSA, Coverdell education savings account (ESA) or qualified tuition program
• Recapture of certain tax credits and other benefits reported on line 44 and line 60, ie. education credit, investment credit, first-time buyer credit, and the credit for employer-provided childcare facilities

Who Must File  a Return in 2011

When tax time comes I am always bombarded with a million questions… and why shouldn’t I be?  Tax laws change every year so with each year comes new issues, new concerns, and new questions.  Below is a question I am asked every year… “what Tax Bracket am I in?”.  I decided to put together a quick reference table to answer that question.

2011 Tax Bracket by Filing Status