How many dependents can I claim on taxes? It's a great question that can have an impact on your tax return and your regular paychecks. The answer: As many as you qualify to claim.
However, you'll need to do it correctly, including on your employer W-4 form and your tax return. People often confuse their W-2, W-4, W-9 and 1099 forms when reviewing their taxes.
Video of the Day
You can't claim dependents or exemptions on a W-2 – that form is your year-end review of your paycheck withholding. You used to be able to claim allowances on your W-4 at the beginning of the year, but that changed in 2020, explains Patriot Software. You can still claim dependents, however. Reviewing how many dependents to claim each year will help you avoid paying too much or too little in taxes each pay period.
Read More: What's Different About the 2021 Child Tax Credit?
W-2 vs. W-4
A Form W-2 is the year-end document you receive from an employer that shows how much in taxes was taken out of your pay during the year. Using this information, you can correctly prepare and file your tax return. Form W-4 is the document that tells an employer how much to take out of your paycheck each pay period. This is the form you use to claim your dependents.
Read More: Child Tax Credit: What Is It & How to Qualify
W-9 vs. 1099
You only fill out a W-4 and get a W-2 if you are an employee. If you are a contractor, you'll give the business (or businesses) you work for a W-9 (similar to a W-4 for employees) and receive a 1099 at the end of the year (instead of a W-2).
Your W-9 gives your client basic information about you, such as your name, address and tax ID number. The 1099 you receive at the end of the year shows how much you received during the year, even though your client did not take out any taxes. Unlike a W-2, you don't need to attach a 1099 to your tax return.
Read More: Choosing Head of Household When Filing Your Taxes
Claiming Your Dependents
You can claim as many dependents as you have, as long as they qualify. This includes dependent children and other adult family members. You can review the IRS website page that explains who qualifies.
Your filing status will affect how many dependents you can claim. Are you single, married, divorced or claiming head of household status? This will affect who you can claim as a dependent.
For example, if you are divorced, only one parent may claim a specific family member as a dependent. The parent who pays more than 50 percent of the dependent's living expenses is the parent who can claim the exemption. The same goes for claiming qualifying dependent adults, such as elderly or disabled parents, whether you are single, married or divorced, explains TurboTax.