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One of the biggest tax breaks you can receive on your 2012 income tax return is the ability to claim dependents. The idea is that those who spend the year financially supporting someone else should be taxed on the money they use to do it. This means that for every dependent you have, your taxable income decreases a little more. Whether you do this every year or this is your first year claiming a dependent, you may have a few questions about how it works, if dependents can only be children, and more. Here are the answers to four of the most frequently asked questions about claiming dependents:
Does It Have to Be My Biological Child?
No. You can also claim your stepchild, foster child, siblings, half-siblings, step-siblings or any descendants of these relatives (your sister’s child that needed to stay with you temporarily). As long as you provide more than half of the financial support to that child and said child lived with you for more than half of the year in question, you can claim them as a dependent. The child does have to be younger than you, though.

Does It Have to Be a Child?
No. Those who don’t have the mental or physical capacity to care for themselves may be claimed for the duration of their lives. They must share your residence for more than half of the year and you need to have provided more than half of their financial support.

What If I Share Custody?
Check your court paperwork to be clear on the type of custody you have. If you have joint custody of a child with his other parent, the person who has physical custody of the child more than half the year gets to claim that child. Otherwise, the person with primary custody of the child gets to claim him, wherever he happens to spend his year.

How Much Do I Get?
When claiming a dependent on your taxes, you get a $3,700 deduction from your taxable income. Taxable income is anything you earned or received during the year that the IRS can take a percentage of. You can also receive additional deductions and credits associated with claiming a dependent based on the dependent’s age and relation to you, including the child care credit and higher education deduction.

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