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Companionship, love and life…you share so much with your significant other! If your freelance business supports you both, there’s another thing you may be able to share with your partner: a $3,950 federal tax exemption. Not a bad bonus for falling in love, eh?

If you have a sweetheart who, by design or by hard luck, has the majority of their living expenses paid by you, read on to see how you can recoup some of those expenses by claiming your S.O. as a dependent on your 2015 tax return.

While you may think of dependents only in terms of children, the IRS definition is much broader: “qualifying relative” dependents include live-in partners and members of your extended family. If your significant other meets each of the following criteria, you can list them as a dependent and receive a tax break:

  1. Cohabitating— Have copied your key, made space in your bathroom, and has your significant other cut loose her lease? If your partner is a member of your household, then you’re officially cohabitating under the law.

  2. Single— To list your sweetheart as a “qualifying relative,” he or she must not be married to you (different tax break), to anyone else, or to anyone within the past year.

  3. Only Your Dependent— No double-dipping dependencies! Your S.O cannot be claimed as a dependent by someone else, nor can they claim dependents for tax purposes.

  4. Citizenship—To qualify, your partner must be a U.S. citizen, resident alien, national, or a resident of Canada or Mexico.

  5. Low Income—The “qualifying relative” dependent exemption stipulates that the dependent’s gross income must be less than $3,950 per year.

  6. Supported By You—To be considered a dependent by the IRS, you must pay the majority of your S.O.’s living expenses (more than 50 percent).

Like any other tax exemption, be sure that you have legal proof to support your dependent claim. Keep records to show that you had the same address or addresses throughout the year as well as canceled checks or receipts for household expenses and for your dependent’s personal eligible expenses.

While the tax advantage for having a partner who is dependent on you does not translate into a large amount of money, for many freelancers it is still significant. Just consider it one of the many benefits of having someone special with whom to share your life.

Got more tax-related questions? File those queries in the Ask your tax questions Hive!

Jonathan Medows is a New York City based CPA who specializes in taxes and business issues for consultants across the country. His website, www.cpaforfreelancers.com, has a resource section with how-to articles and information for freelancers.


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