The funds that I was allowed for having my parent as a dependant is not showing up on my return, why?

moniquelemus1 — Thu, 06 Jun 2019 09:14:59 GMT

You get a deduction, if you are allowed to claim your par...

sceptre2017 — Thu, 06 Jun 2019 09:15:01 GMT

You get a deduction, if you are allowed to claim your parents on your return. However, you do not get a dollar for dollar increase on your return for the deduction. if you are able to claim your parents as a dependent then you get a $4.050 deduction against your taxable income. So for example, lets assume for this example the tax rate is 10% and you made 40,000, and paid 3,500 in tax withholding. For this example do not worry about standard deductions or other stuff. For this example, if you were not able to claim your parent as a dependent you would have tax of 10% of $40,000 or $4,000. However, since you paid in 3,500 already -- you would owe another 500. However, with the dependency deduction your taxable income is now 40,000 minus 4,050 or 35,950. So your tax would be 10% of 35,950 or $3,595. The deduction for claiming your parent reduced your tax from 4,000 to 3,595 or a savings of $405. So now since you have a tax of 3,590 and paid in 3,500 you only owe 90 in tax.

**So your dependency exemption deduction does not give you 4,050 in a larger refund, it merely reduces your taxable income, so that your tax liability before any credits or withholding is smaller.

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The funds that I was allowed for having my parent as a dependant is not showing up on my return, why?

You get a deduction, if you are allowed to claim your par...