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duncanvillesteve · Jan 17, 2007, 08:35 PM

My 21 year old daughter finished college in May of 2006, moved back home and got a full time job. She paid no rent or other and we continued to pay all of her expenses. She got married on December 30th. Can I still claim her as a dependent given that I paid all of her expenses (including college) for 364 days of 2006?

AtlantaTaxExpert · Jan 17, 2007, 09:00 PM

You cannot claim her if she claims herself by filing jointly with her husband.

Because she was in college for at least five months of the year, she meets the full-time studen exemption, so she CAN file Married Filing Separately and give up her exemption to you.

How much did she make in her job? If the amount was less than $15,000, she is probably in the 10% tax bracket. It would probably be more advantageous for you to claim her, but you need her cooperation, because the decision whether to claim her own exemption or let you claim is irrevocably hers alone.

Suggest you get together with the married couple and discuss this in detail. Do the returns both ways and offer to reimburse them for the tax savings they lose by letting you claim her. If, as I suspect, you are in the 25% tax bracket, you will still come out ahead even if you have to write them a check. That way, it's a win-win situation.

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duncanvillesteve · Feb 11, 2007, 08:28 PM

Thank you for your response; my daughter has agreed to allow me to claim her one final time for 2006 given that we paid for her final semester at college and she lived at home until she was married on Dec. 30th. Now-should she file as married, filing separate returns; married filing jointly but not claiming herself as a one exemption; or, given that her W2 is still in her maiden name, file as her maiden name for 2006 (with no exemptions) waiting until tax year 2007 to file under her married name? Thank you in advance.

AtlantaTaxExpert · Feb 12, 2007, 10:19 AM

Steve:

Even with her cooperation, you cannot claim her. The following is a verbatim quote from Table 3-1, IRS Pub 17:

You cannot claim a married person who files a joint return as a dependent unless that joint return is only a claim for refund and there would be no tax liability for either spouse on separate returns.

So if your daughter or her husband made more than $8,450 in 2006, you will not be able to claim her.

If he made less than $8,450 and she made less than $5,150, then you can claim her, but I doubt that is the case.

Sorry.