when people come to ask what is a tax dependent. which means; if you have any dependents you can claim a certain amount as an exemption. These rules can change consistently every year, so check your own country of the Internal Revenue Service.
what is a tax dependent: A clear definition
of dependent can be anybody except you. because you taxpayer. you cannot be dependent on yourself. Internal Revenue Service says the dependent has a certain amount to deduct; which is an allowance.
let’s say you have one child and no spouse. then you have one depended. you can deduct that dependent amount. which this amount can be 3500 dollars to 5000 dollars. however which is determined by the IRS every year. if you want to know the current year dependent amount then check your own nation’s Internal Revenue Service website.
the dependent tax is determined and based on your income . so let’s take one example to make you more understand about the dependent tax.
what is a tax dependent; example
for instance, let’s say you are living in the United States of America and you have two children and one spouse. and also your spouse also has a job and she also has an income. moreover, you married joint fillers Now you want to file the tax return for your income.
so now you want to know the exemption on your income. Let’s say your income is 40,000 dollars. and your spouse’s income is 30,000 dollars. when you are a single taxpayer; you will pay more tax than you do in joint fillers with your spouse. so let me say you are in the tax bracket of 23%. which means you have to pay twenty-three percent tax on your remaining income.
some people have doubts about what is my remaining income ? when you want to know the taxable income. it’s all based on your income and dependents. if you have more dependents. then, you will pay less tax. When you have a low dependent you have more tax on your income.
clearly, in this example let’s say your total income is 70,000 dollars. and you have two children and one spouse. then, don’t forget about the standard deduction. let’s say your standard deduction is 25,000 dollars; total .and also you have three dependents now. which is your two children and spouse. you cannot be dependent on yourself.
rules and regulations of the government every year;
now you can check the rules and regulations of the current year on the Internal Revenue Service website. which is mentioned: every dependent has a 4,300-dollar exemption. if you take an exemption for three people. then, your income will reduce.
so before taking your dependent exemption. let’s subtract our standard deduction which is twenty-five thousand dollars. if you subtract it, then your income remains at 45,000 dollars.
on the other hand, you will have three allowances in your family. so multiply the total allowance by 4,300 dollars. then, you will have 12,900 dollars as an exemption on your income.
finally, if you subtract your dependent amount from your income . then you will end with 32,100 dollars. so this income is your taxable income. now you are in a twenty-three percent tax bracket as joint fillers.
as a result, if you multiply the 23% by your remaining income of 32,100 dollars. then, you will get the tax amount that you want to pay . which is 7,383 dollars. this is the amount, you want to pay as tax to the government.
so now I think, you will know how to know what is a tax dependent and how to calculate that on your income. if you have any more doubts about it, then don’t hesitate; feel free to contact us. we are here to help you.