Video: Qualifying Dependents

Dive into the world of tax advantages with Nick Palazzolo, CPA, as he unpacks the intricacies of claiming qualifying dependents on tax returns. Watch as he breaks down the two main categories: qualifying children and qualifying relatives, detailing the specific criteria for each that taxpayers must meet to claim potential tax credits and deductions. Nick highlights key aspects such as the age, relationship, residency, support, and income requirements that define dependents, adding a touch of humor to the complex subject. With a focus on the significant impact of dependents on tax returns and the changes brought by the Tax Cuts and Jobs Act, this lesson is an essential guide to understanding how to leverage tax benefits correctly and improve the chances of securing a refund.

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Video Transcript

Instructor: Nick Palazzolo

Nick Palazzolo is head instructor of ExamPrep.ai CPA Review. Nick's teaching style is engaging & upbeat, combining practical Big 4 tax & assurance expertise with years of 1-on-1 coaching. His lessons are concise and emphasize what you need to know to pass. Whether you're a recent grad or working full-time, we’re confident you can conquer your CPA exams with Nick’s review.

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Qualifying dependent. As promised, we've got this. We're talking through it now. We've got these dependents, right? These leeches on our lives. Children are great. Dependents are great. Family members are great. All right. For individual income tax purposes, the IRS allows taxpayers to claim dependents. Generally, let's think about this. Standard example. You got parents and you got kids. Well, the kids aren't filing taxes. Let's think of a seven-year-old kid. Illegal for that person to have a job at all. So that's going to be a dependent. Slam dunk example. Obviously, we'll talk about the intricacies of it, but these are dependents. And what are dependents? If you claim a dependent, this is someone who is not going to file their own tax return and is dependent upon you, you get tax advantages. This helps reduce your overall tax liability. Dependents are individuals that the taxpayer supports financially. And in return, the taxpayer can claim certain tax benefits, such as exemptions, deductions, and credits. We got two main categories of dependents. We've got qualifying children and qualifying relative. So we call that dependent relative. Same thing, synonyms there. Each category has its own set of criteria that we have to meet for the individual to be considered a dependent. I want you to memorize the criteria. We'll see these broken out later on, but kind of talking about this overall first. Once we see them broken out, each of the check boxes you have to meet, I want you to memorize those for sure. Now, qualifying children. A qualifying child is typically the taxpayer's child, stepchild, adopted child, foster child, sibling, or descendant of one of these relatives, such as a grandchild, niece or nephew. So you see there's different rules, whereas before the foster child didn't apply

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Federal Taxation of Individuals: Filing Status, Gross Income, & Adjustments

Module: 3 Concepts, 54 Videos

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