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Stephanie B.
Stephanie B., Enrolled Agent
Category: Tax
Satisfied Customers: 555
Experience:  MTax, EA, QuickBooks Proadvisor. Over 10 years accounting and tax experience specializing in individual and small business.
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I have been paying the medical and dental costs of my nieces

Resolved Question:

I have been paying the medical and dental costs of my niece's 24 year old daughter who is unemployed and living with me for the last 4 months of 2012. She is not eligible for unemployment.
Am I able to deduct any of these charges as donations or outright medical expenses on my 2012 income tax return?
Regards XXXXX XXXXX
Dave
Submitted: 1 year ago.
Category: Tax
Expert:  Stephanie B. replied 1 year ago.

Stephanie B. :

Thank you for your question.


In order to answer your question correctly, I need to know if your niece qualifies as a dependent. Here are the “qualifying relative” tests. Can she be your dependent?


 


Here are the tests for a qualifying relative.


 


1) You cannot be a dependent of another taxpayer.


2) The potential dependent can not file a joint tax return with another taxpayer.


3) The potential dependent must be a US citizen, a US national or a resident of the US.


4) Relationship test-The potential dependent must be your child, a sibling, a parent, a step or in-law, or a descendent of any of these. Also, any person who lives in your home the entire year could be also be a “qualifying relative”.


5) Not a qualifying child test-The potential dependent can not be a “qualifying child” of any taxpayer.


6) Gross income test-The potential dependent can not have gross income of $3800 or more. Generally, gross income is all income that is not exempt from tax. If the person is receiving social security disability or SSI only, this is not considered taxable income so would not be included in the gross income test.


7) Support test- You would have to provide over half of the potential dependent’s support. Here is a worksheet to assist in determining where the person’s support comes from. http://www.irs.gov/app/vita/content/globalmedia/worksheet_for_determining_support_17.pdf


 


 


I look forward to your response.

Stephanie


 

Customer:

Again, this person is the daughter of my brother's daughter. She has lived with me for 5 months of 2021. Is a US citizen, cannot be a dependent of another person. I will need to check if she had any income for earlier in 2012. I would not pursue this except for the fact of dental bills which are significant. So, you are saying that the only way I could deduct the dental expenses is if she was a dependent of mine?

Stephanie B. :

If she could have been a dependent according to the above tests, but was not because of any of the following situations, you may be able to claim the medical expenses you paid while she was a dependent or that were incurred while she was a dependent.

1) The person who paid the medical expenses was a dependent of another taxpayer,


2) The person for whom the medical expenses were paid filed a joint tax return,


3) The person for whom the medical expenses were paid had gross income of $3800 or more,


4) The dependency exemption for a child of divorced or separated parents was assigned to the non-paying parent.


 

Stephanie B. :

If she does not qualify to be a dependent for exemption purposes in the tests first listed, and she does not count as a dependent for medical purposes according to the second list, you can not claim her medical expenses as a deduction.

Stephanie B. :

Donations and contributions are only allowed for IRS recognized charitable organizations. An individual person, no matter what relation to you they are, will not count for a donation deduction.

Stephanie B. :

Keep in mind that a "qualifying relative" does not have to live in your home. However, you do have to pay over half of her support for the entire year.

Stephanie B. :

Please let me know if you need further clarification.

I look forward to your response.

Stephanie

Customer:

i am going to review all with my relative this afternoon. If she will have earned income and must file taxes, She will not be my dependent

Stephanie B. :

No. But if that is the only thing from claiming her as a dependent for exemption purposes, you can claim her medical expenses but not her as a tax dependent. They are two different things.

Customer:

ok, I have confused myself. I can claim her dental/medical expenses without her being my dependent? If i choose to deduct just the expenses, what category of a deduction is it?

Customer:

Dave

Stephanie B. :

It would be a medical deduction on your Scedule A, just like your medical expenses.

Stephanie B. :

Review the list again that I posted above. I have reposted it.


If she could have been a dependent according to the above tests (I didn't repost the Qualfying Relative tests but can if you need me to), but was not because of any of the following situations, you may be able to claim the medical expenses you paid while she was a dependent or that were incurred while she was a dependent.
1) The person who paid the medical expenses was a dependent of another taxpayer,


2) The person for whom the medical expenses were paid filed a joint tax return,


3) The person for whom the medical expenses were paid had gross income of $3800 or more,


4) The dependency exemption for a child of divorced or separated parents was assigned to the non-paying parent.

Stephanie B. :

For example, say she isn't a dependent for exemption purposes because she makes to much money...over the $3800....you could still claim her medical expenses you paid because this is an exclusion for the term dependent for the medical deduction.

Stephanie B. :

You first have to determine if she could be your dependent using the Qualifying Relative tests. Then, if she isn't a dependent under these tests, why? If the reason is one of the four exclusions listed above, you can still claim her medical expenses on Schedule A.

Stephanie B. :

Let me know if you need further clarification.

Stephanie B. :

Stephanie

Stephanie B., Enrolled Agent
Category: Tax
Satisfied Customers: 555
Experience: MTax, EA, QuickBooks Proadvisor. Over 10 years accounting and tax experience specializing in individual and small business.
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