Question

In: Accounting

Diego is married to Consuela, who lives with him. Both are U.S. citizens and residents of...

Diego is married to Consuela, who lives with him. Both are U.S. citizens and residents of Nebraska. Diego furnishes all of the support of his parents, who are citizens and residents of Mexico. He also furnishes all of the support of Consuela’s parents, who are citizens and residents of El Salvador. All of their parents had no gross income for the 2019 tax year. If Diego and Consuela file a joint tax return in 2019, how dependents can they claim on the joint return?

Solutions

Expert Solution

Beginning with 2018 returns, claiming dependents no longer gets you a personal exemption for them, as the personal exemption has been eliminated in favor of a much higher standard deduction. For 2017 returns, the personal exemption was worth $4,050 for each person on your return, which reduced your taxable income. The change was part of tax reform legislation passed in 2017, which you can find more out about in the Tax Reform 101 section.

Rules for dependents:-

  • Dependents can have their own tax returns, and even be married, but they must not have filed a joint tax return for the year unless it’s just to claim a refund.
  • They must be a U.S. citizen, U.S. national, or a resident alien.
  • They must have a taxpayer identification number. That’s usually a Social Security Number, but if the child doesn’t qualify for one, it can be an Individual Taxpayer Identification Number (ITIN) or an Adoption Taxpayer Identification Number (ATIN).

Since the third rule is violated neither Diego parents or Consuela parents can be included for claimining deduction under dependents.

You can't claim someone as a dependent who is filing a joint tax return with someone else (usually a spouse).One exception is if neither the person you claim as a dependent nor their spouse made enough income to be taxable, but they filed a return to get reimbursed for wages withheld.

Thus no dependents can be claimed in this joint filing.


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