Are there tax implications for a guardianship?

Yes, there are tax implications for a guardianship. In Colorado, the guardian is responsible for filing taxes on behalf of the person or persons they are legally responsible for and for whom they are providing care. For parents, they can claim their ward as a dependent if taxable income is present. They are also able to claim credits, deductions, and other benefits applicable to legal dependents. If the guardian is receiving money on behalf of the ward, they must report the income on their own tax return. Investment income must also be reported on the guardian’s tax return, although they may be able to take advantage of special tax breaks, such as the “kiddie tax” and the “dependent care” credit. In addition, the guardian may be responsible for filing state and local taxes, depending on the jurisdiction. For example, in some cases, guardians may need to file a Colorado state tax return for the ward and/or the guardian. Finally, it is important for guardians to keep good records of all income and expenses related to their guardianship. This information is essential for filing taxes and for potentially taking advantage of tax benefits and deductions.

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Are there tax implications for a guardianship?

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