I’m a big fan of Alfred Hitchcock movies. One of my favorites is The Trouble With Harry. Another movie with a similar plot is Weekend at Bernie’s.
These movies deal with death in a light-hearted manner. Since this is a Bozo tax tip, how does this apply? Well, a few weeks ago I had a meeting with a potential client, who wanted to claim his father as a dependent. I asked him if his father lived with him; he didn’t. I then asked where his father lived, and I was told he had passed away…in 2003.
There are rules about claiming dependents, and they do have to be alive sometime during the year. I expressed my sympathy to the potential client, and suggested he find a different tax professional to prepare his return.
There are some tax benefits to those who lose their spouse during the year. They still get to file as married for the year. If a decedent was a dependent at any time during the year you can claim them as a dependent. Widows or widowers who lost their spouse within the last two tax years preceding this year and have a dependent child may be able to file as a widow or widower with a dependent child.
But please don’t try to claim your relatives who passed away years ago on your tax returns. If you do, you’re likely going to be paying a visit to ClubFed.
Tags: BozoTaxTips