Check out some similar questions!

sjnowak · Jan 19, 2017, 03:41 PM

Taxes

Is there a limit to how much money a child can make where we cant claim them as a dependent ? Our daughret is a college student who lives at home with us ( her parents ) so we support her, we have always claimed her as a dependent. She works part time and filed her taxes and said she made too much money we cant claim her anymore. I say why not, we're her sole means of support. Confussed here. Thanks.

joypulv · Jan 19, 2017, 06:35 PM

You can claim her IF she is under 24, a full time student, lives with you more than half the year - AND you provide more than half her support.

You have to work out what her support costs. The IRS has a worksheet but it's basically deciding what rent would cost on your home, plus utilities, and food, etc, and dividing by number of people.

Be careful. Since she has already filed, if you decide to claim her anyway, you can run into a mess that can last for years.
Sure, you may provide more than half of her support. Children rarely have a clue what support costs. But it's a bit late to do anything this year, unless you make her file an amended form.

A suggestion is to work out taxes both ways to see which benefits all of you overall, and then split the difference. Next year!

AtlantaTaxExpert · Jan 19, 2017, 08:30 PM

Joy covers all the issues and pitfalls, and I endorse her post!

sjnowak · Jan 20, 2017, 04:17 AM

How much is that going to cost us at tax time extra ?

joypulv · Jan 20, 2017, 05:52 AM

Depends on how you do your taxes and how much she made. Do your taxes with and without her and find out. It's not that hard. If you use tax software, it's even easier. If you hire someone, just ask how much you would have saved after you have them done without her.

She can start paying you rent (partly as reimbursement) after you find out. Time for her to learn a thing or two about finances, right? Don't blame her. Kids rarely have a clue. Parents should spend more time including them in family finances when they are in their early teens, but they don't.

AtlantaTaxExpert · Jan 20, 2017, 09:01 AM

All good advice.

sjnowak · Jan 20, 2017, 03:52 PM

Oh we do, helped her do them last year and we discussed then that we claim her. Took her to an FPU class. So we try, but sometime you just cant get them to understand.

joypulv · Jan 20, 2017, 05:25 PM

Perhaps you 'support' her a little too much? All she buys are clothes and fun out with friends?
Let's say the very minimal amount you pay for her basic room and board and utilities is 700/mo = 8,400. Say she grossed 10,000. You have no say in the matter.
But you can increase your costs to more than 10,000, and document it, and then if she files for a refund, SHE gets years of hassle from the IRS.
Your choice.