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I'm a bit confused about what to expect when I file tax returns. I heard my parents can't claim me as a dependent because I earned more than $6k for the year. What's the situation if I live with them and have most of my expenses paid by them? They paid over $22,500 in college tuition for the past year. So on paper, I'm not a dependent, but in reality, I'm living with my parents and have most of my expenses paid by them. If my income doesn't qualify me to file as a dependent, how much tax return should I anticipate?

Taxes paid:

Fed: $2821, State: $780

35

There are no pure income requirements when claiming someone as a dependent - the main requirement is that your parents need to have provided more than half of your support for the year. Since they paid $22k in education expenses and you only made $20k, certainly they paid for more than half of your support (even if it were less, they could claim that they provided housing and food as well)

So yes, they can claim you as a dependent.

That said, the main difference is that the personal exemption for you ($4,050 for 2017) will count towards their income rather than yours. That may be a better deal for the family overall since your tax bracket will likely be lower than theirs, but that's between you and them.

how much tax return should I anticipate?

You'd need to complete your full tax return to be certain, but a VERY ROUGH calculation would be

  income                $20,000
- standard deduction    $ 6,350
-----------------------------
  taxable income        $13,650

  tax = 932 + 15% * (13,650 - 9,320)
      =               $1,581 
      - withholdings  $2,821
      = refund        $1,240 

If you claimed yourself as a dependent rather than your parents, your taxable income would be $4,050 lower, giving you an additional $607 refund (4,050 * 15%).

However, since your parents provided a majority of your support, it's perfectly reasonable for them to be entitled to the tax break.

  • 2
    When you say, "that's between you and them", that's not entirely accurate. The IRS says that if someone else can claim you as a dependent, then you cannot take your personal exemption yourself. However, I suspect that for borderline cases they are unlikely to question the judgement of the taxpayer. – prl Dec 20 '17 at 5:01
  • Where does the 932 come from? – Matt Crandall Dec 20 '17 at 16:37
  • 1
    The lowest tax bracket in 2017 is 10% and caps at $9,320. – D Stanley Dec 20 '17 at 16:47
8

Whether or not you are a dependent is a separate issue from whether or not you must file a tax form.

Per page 17 of the 2016 instructions for Form 1040, you can be claimed as a dependent by your parents if you are their child, under the age of 24 and a student, and they provided over 50% of your support (living expenses). There are other factors that can affect dependency, but none that would seem to apply to you (non-U.S. citizenship of the child; child being married; parents being claimed as dependents on someone else's taxes).

You most likely need to follow instructions for filing taxes as a dependent. It seems you are already doing this, as a dependent must file taxes if income exceeds $6,300.00 , while if you were single and independent, you would need to earn at least $10,350.00 to be required to file.

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