Do you currently have your adult child (ren) living with you
If you support adult children, or even give them a hand here and there, you're not alone. In the difficult job market today, getting a good career started may take a little longer than expected.
The last thing you need when trying to be helpful, however, is to be worried about paying the gift tax.
Fortunately, your chances of actually because gift taxes are very low and you probably do not even need to file a tax return on donations.
to set your mind at ease, first determine if you have given it all a child more than the limit of one calendar year.
How much can you give?
you can give a child up to $ 14,000 in one year before you have to file a gift tax return (in 2012, this amount was $ 13,000).
If your child is married, you can also give up to $ 14,000 for each spouse. If you are married, you and your spouse can also make donations, which means the maximum donation a couple could give another couple without filing a gift tax is $ 56,000.
This amount is per calendar year and does not roll every year. Try not to give all your help in one year if you want to avoid the filing of gift tax returns. This year the year of exclusion changes to year, so make sure you know what the amount of the exclusion is for a given tax year.
all money transfers are not gifts
The IRS is not interested in the rental value of the former room of your child, or the amount of food that disappears your refrigerator.
If you are ever audited, however, the IRS may notice large checks written to your adult child, or transfer of a valuable asset, like a car.
you can pay as much as you want for tuition, medical expenses, or medical insurance premiums on behalf of your children without worrying about the gift returns.
make sure that you pay, school, hospital or other organization directly.
payment services
Any amount you pay for your adult child, whether in your business or personal, is not a gift. The amount you pay should be reasonable, and the child must have actually done the work.
If you pay your child in your business, you can deduct the amount you pay him as a business expense. It's a win-win situation - you avoid the possibility of gift tax and reduce your tax bill, while your child feel useful and does not need to feel guilty accepting help
Your child may even be able to. contribute to a pension plan like an IRA, if he earns an income by working for you.
If your child is over 21, you generally need to payroll taxes if you pay your salaries children.
depositing a donation statement does not mean you have donation
What happens if you give your child more than $ 14,000 in a year?
not much. You must file Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.
Until your total donations reported on gifts statements reach the amount of the lifetime exemption of $ 5.25 million, you will not owe any tax. This puts most of us in the clear.
These amounts may change in the coming years.
Your child is adult dependents?
If you support the age of your adult children without disabilities aged 24 or over, you can not claim him as a "qualifying child" to be a dependent by the definitions of the IRS.
However, you might be able to claim him as a "qualifying relative." Each dependent in your statement reduces your taxable income of $ 3,00.
you can claim your son, daughter, spouse, eligible foster child, brother, sister, half brother, stepbrother, or a descendant of one of the above as a relative qualification. Adult children should not live with you for a dependent.
To qualify as your child adult dependent must have less than $ 3,00 in gross income for 2013, and you must provide more than 50% of his or her total support.
If no one has supplied more than 50% of its support, but two or more persons together was a person who has contributed more than 10% of the carrier can ask the dependency exemption.
people who support the adult child must accept taking the exemption.
How long would you be willing to support an adult child who is having trouble making alone or find a job
photo credit: Shereen M via photopin cc
0 Komentar