Member Of Household Test
Categories: Tax, Real Estate
Mortgages. Utility bills. Food. Clothing. Netflix. Putting a decent roof over our own head can be expensive enough, but if we’re also trying to provide for a family? Hoo boy, can those expenses skyrocket. That’s why the IRS cuts us a little slack every April and allows us to claim those family members as dependents on our taxes. Dependents = big tax breaks; each one can reduce our taxable income by upwards of $4,000. That’s huge.
But what if we’re providing for someone who isn’t an immediate family member? Like...what if our nephew Will got in a fight in Philadelphia and has been sent to live with us in Bel Air while he straightens himself out? Can we claim him as a dependent? Why yes we can, because he’s family. But if we also take in Will’s friend Jazz, then Jazz is going to need to pass the IRS’s “Member of Household Test” for us to claim him as a dependent. We need to prove that, not only has Jazz been living with us for the past year, but also that no one else is claiming him as a dependent and he’s not filing a joint return with a spouse somewhere. But once we’ve done that, we can claim that sweet tax deduction and get back to chillin’ on our throne in Bel Air.
