Little Known IRS Deductions and Rules


January 29, 2010 by Marj Hatzell

We’ve been working on our taxes and we’re trying to maximize the deductions.  We know about medical expenses and health savings account and we were doing a little research to find out what we can deduct with a “permanently and totally disabled” child, like Bugaboo.  Right now, due to his lack of SSI (we were turned down.  Ridiculous BS.) we cannot claim that on our form.  But the more we read on the IRS site, the more we were all, “Huh?  What?  YOU CAN DO THAT?   YOU CANNOT DO THAT?”

  • For example, if you have a child and it is kidnapped, the child must have been with you for at least six months of the year in order for you to claim said child on your taxes (and the child cannot have been kidnapped by a relative or parent).
  • You cannot claim a stillborn child but if your child is born alive and then dies immediately, you can claim that child.
  • To claim a child if you are divorced, said child must be with you for six months of the year or you must have joint/half custody of said child.  You  must also prove you provided at least half of the child’s support. If your ex, who is not custodial parent of the child, provides at least half of the child’s support, they can claim the child and you cannot.  Same goes if you were never married and the kid never lives with them but they still give you a check every month.
  • Say you have your 18-year-old living with you and he knocks up his baby momma.  And marries her. They both live with you. If they don’t make any money and sit in your basement all day, eat all the food from your fridge and watch your tv, as long as they don’t make any real money, you can claim him.
  • If your son and his baby momma have the baby and they make way less money than you (or none) you can claim their baby, provided you have income.
  • If they have jobs for six months, move out and leave the kid behind for you to take care of, you cannot claim the kid.
  • You cannot claim as a dependent a child who lives in a foreign country other than Canada or Mexico, unless the child is a U.S. citizen, U.S. resident alien, or U.S. national. There is an exception for certain adopted children who lived with you all year.
  • If all of your loser brothers and sister move in with you, with their children and bring your step-relatives or half-relatives and mooch off of you for a while, you can claim them.
  • If you have a permanently and totally disabled child, they are adult age, they attend a sheltered workshop and make sixty cents an hour, you cannot use that money to provide ANY support for them, or you cannot claim them.  Even if you PAY them the money that they make in that type of program.
  • If your stupid eighteen-year-old college student goes out and buys a $9,000 car and then you end up paying his $6,000 tuition, you can’t claim him because he paid more than you did.
  • If you live in a Midwestern State and suffer a catastrophic loss, you can claim it on your taxes.  Like, tornados and stuff.
  • If you are blind, over 65 or permanently disabled and are on SSI, you get a special deduction. But if you are permanently disabled and don’t’ receive SSI, you have to spend a certain percentage of your AGI on medical or else you can’t put that down as an exemption. And naturally, we spent about $1,000 less than the qualifying amount, so we can’t get that exemption.

Is your head spinning yet?  This is why I don’t prepare taxes. There are literally pages and pages and pages and pages of this stuff. I only read through a handful of pages related to children and exemptions.  And the government wonders why people have trouble preparing their own taxes…

5 thoughts on “Little Known IRS Deductions and Rules

  1. Kristy says:

    Yeah, I could prepare my own taxes when I was a starving college student using the 1040EZ. I think I even prepared my own standard 1040 when I was single. Of course, I didn’t own anything of consequence and was childless. But paying taxes was certainly easier!

  2. The last one is difficult because even if you are deemed ‘blind’ by the state, you may not be eligible for SSI or other credits. It’s very challenging, but there are formulas and someone has to make the rules.

    Best of luck to you on your taxes!

  3. That’s a mold-breaker. Great thinking!

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