Everyone wants to lower their income tax burden, but not everyone is eligible to use some of the more high-end tax strategies to do so. However, claiming dependents is a tax reduction strategy that every American taxpayer has access to. Are you getting the most out of your dependent deductions and benefits? Discover a few key ways you may be able to lower your taxes even more. 

1. Claiming Qualifying Relatives

Dependents come in two basic varieties. The first is a qualifying child. This is what most Americans think of when they think about claiming someone as a dependent. These are typically the taxpayer's own minor children or a minor descendant of their immediate family members. 

However, you can also claim unrelated and more distantly related individuals—even those who are not minors. Qualifying relatives are generally persons in your household for whom you are providing more than half the support. They cannot make more than $4,700 in 2023, and most must actually live in your home. But some—like parents and grandparents—may live elsewhere. 

2. Claiming Your Partner

The qualifying relative rules provide a surprising opportunity to claim another dependent: your partner. Legal spouses cannot be claimed as a dependent, even if they have no income. However, your boyfriend, girlfriend, or partner may qualify as a dependent. They must meet all the qualifications of the category, including income limits. This strategy can be very helpful if one partner is unemployed or going back to school. 

3. Using Dependent Expenses

Once you can claim a qualifying child or relative (including a non-related person), you can also claim a range of expenses related to them. The most common include things like premiums you paid for their health insurance, child care services, tuition, and medical expenses. 

Deductible expenses are easily overlooked, especially when they are for people you did not expect to claim. But they add up quickly, so if you suspect you may be able to claim a dependent at the end of the year, save those receipts now. 

4. Filing Separately

Do you file income taxes with someone who could qualify as your dependent or the dependent of someone else? IRS rules stipulate that you cannot claim a dependent if you can be claimed as a dependent by someone else. This also holds true if your joint filer can be claimed as a dependent. 

In some cases, you may want to consider not filing jointly with your partner if either of you are in these categories. If your partner, for instance, spent the year living with their aged parent to help care for them, the aged parent may be able claim that partner. Filing jointly with them would prevent you from claiming any other dependents in your household, such as a shared child. You may file separately to maintain that ability. 

5. Becoming Head of Household

A qualifying child or qualifying relative brings another tax status change: from single to head of household. This is more than just semantics. Heads of household qualify for higher deduction limits, larger tax credits, and more favorable tax rates. Even if you get little benefit from actually claiming a dependent, switching to head of household could help a lot more. 

Are you underutilizing any of these dependent strategies? Missing out on the head of household status, expenses to deduct, or a qualifying household member? Find out by meeting with Bliss & Tuttle CPAs. We will assess your family situation, locate all tax reduction methods you may be eligible for, and even help you make amendments to prior years if needed. Call today to make an appointment.