[AlyssaP]

Hi, another dependency question.

So my mom just got her green card and arrived to US on June 27, so I can claim her as a dependent on my taxes since my husband and I provided her with more than half of the support and by the end of the year she will have stayed with us for over 183 days. But my mother started working and now she is paying most of her salary for my sister's (who is an F-1) college. So can my mother deduct my sister's school when she files a return while being a dependent on my taxes?

Thanks!
A.

[AtlantaTaxExpert]

Your mother CAN probably claim your sister as a dependent, but YOU cannot claim your mother as a dependent because your mother will probably earn MORE than $3,550 in 2008.

Assuming she does make at least $3,550 in taxable income, she will have earned TOO MUCH to be considered a "qualifying relative" for the dependency exemption.

[AlyssaP]

[QUOTE=AtlantaTaxExpert]Your mother CAN probably claim your sister as a dependent, but YOU cannot claim your mother as a dependent because your mother will probably earn MORE than $3,550 in 2008.

Assuming she does make at least $3,550 in taxable income, she will have earned TOO MUCH to be considered a "qualifying relative" for the dependency exemption.[/QUO

So $3,550 is the threshold that determines whether I can claim her or not? She starts a part-time job this September and I doubt that she will make that much before the end of the year.

Thanks a lot for your help!

[MukatA]

To claim you mother as dependent, it is not required that she lives with you. For requirements, read qualifying relative Your U.S. Tax Return: Requirements for claiming a dependent

[ebaines]

AlyssaP - the answer to your question is no. Assuming that your mother does qualify as your dependent (i.e, she makes less than $3550 and you provide at least half her support), then she in turn can not claim your sister as her dependent. This is because if you are claimed as a dependent by someone you can not in turn claim anyone else as a dependent. This means that your sister can not be a dependent of your mother. Consequently your mother can not apply for either the Hope or Lifetime Education credits for your sister's tuition payments, as both of these are only available for people who pay higher education expenses for himself/herself, a spouse, or a dependent.

[AlyssaP]

AlyssaP - the answer to your question is no. Assuming that your mother does qualify as your dependent (i.e, she makes less than $3550 and you provide at least half her support), then she in turn can not claim your sister as her dependent. This is because if you are claimed as a dependent by someone you can not in turn claim anyone else as a dependent. This means that your sister can not be a dependent of your mother. Consequently your mother can not apply for either the Hope or Lifetime Education credits for your sister's tuition payments, as both of these are only available for people who pay higher education expenses for himself/herself, a spouse, or a dependent.

Thanks for your help, Ebaines!

So I guess we will have to see which way we will get a bigger deduction. I assume that we will be able to get a bigger deduction if my mom claims my sister and deducts her tuition than if my husband and I (annual income around 150K) claim her as a dependent. Right?

Thanks,
A.

[AtlantaTaxExpert]

Just remember that if your mother makes $3,550 or more, you CANNOT claim her as a dependent. That figure is absolute and her pay is documented on the W-2 which is sent to the IRS.