Is a live in girlfriend a tax deduction?

Answer 1

This is a qualified Yes (with some exceptions). They are an exemption as a dependent, but not someone you can claim dependent care expenses unless they are disabled. You can claim educational expenses you paid for this person. The new tax laws allow it if they meet the residency requirement (lives there 365 days a year), make less than $3500, and the relationship doesn't violate local law. It's good that in tough economic times, people can support others even if not related. For instance, if your girlfriend Judy lived with you for a full year while she finished an associate's degree, and you paid for her associate's degree tuition, then you can deduct those educated expenses.

Unfortunately, there is much confusion and many people have been given inaccurate information about this because they are used to older pre-2005 tax laws (in fact, this article inaccurately said it wasn't deductible until 3/2009). Additionally, even some tax software has not been updated to this tax law. Therefore, it's highly recommended you consult the IRS or an accountant and review publication 501, section "Qualifying Relative".

Below are some select parts of the tax law:

== There are four tests that must be met for a person to be your qualifying relative. The four tests are: # Not a qualifying child test, # Member of household or relationship test, # Gross income test, and # Support test. Tests To Be a Qualifying Relative # The person cannot be your qualifying child or the qualifying child of any other taxpayer.

# The person either (a) must be related to you in one of the ways listed under Relatives who do not have to live with you, or (b) must live with you all year as a member of your household2 (and your relationship must not violate local law).

# The person's gross income for the year must be less than $3,500.3

# You must provide more than half of the person's total support for the year.4

== To meet this test, a person must either: # Live with you all year as a member of your household, or # Be related to you in one of the ways listed under Relatives who do not have to live with you. If at any time during the year the person was your spouse, that person cannot be your qualifying relative. However, see Personal Exemptions, earlier.

More info:

Publication 501: Qualifying Relative ( http://www.irs.gov/publications/p501/ar02.html#en_US_publink100041887 )