College student & claiming self & taxes

[SoonerSarah]

Obviously, my oldest is 7, so this is not in regards to us...

So a family has a daughter that is a sophomore in college. College is in the same town as parents, but daughter lives on campus (part of her scholarships).

Daughter's scholarship covers everything except about $2-3,000 which she pays for herself. She lived with parents for a bit during the summer this past year, maybe 6 weeks at the very most before moving out. She did not live with them during any breaks between summer and Christmas break. She works her own job and has a car.

Her address through the school is still listed as her parents address, because everything for the next school year was done before her Freshman year was over and she didn't really think to change it. During the first 6 months of the year, parents say they paid car insurance and medical bills (she said they did help with some stuff, but not all), but that is it. She rarely ate at home, especially after she moved out. In May, she had enough credits on her dining plan that for most of the dinner meals for about 3 weeks, she was able to feed herself, her parents and her younger sister as well.

They are having somewhat of an argument (which stems back to further problems really) about the taxes. Parents want to claim her on taxes, she went to a tax person and was told that if her parents claim her, she will lose out on a $400 refund and she will then owe $300, and that if they claim her, they should pay her the $400 (which really, I think it should be $700...but I'll keep my mouth shut on that amount).

Does anyone have any thoughts on this? I guess I'm sort of inclined to agree with the college student, that she should be able to claim herself...but perhaps I'm wrong.

 

[SandrA9810]

If she has a job and makes more than the alloted amount, I believe of 5,700 per year for a single person/no dependents, then her parent's can't claim her. If they do claim her as an adult dependent, they're only going to receive about $600 more in their taxes.

If both file, she files as a single/no dependent and her parent's try to claim her, one or both will be audited. I would assume the daughter would be ok, and the parent's would have to pay out for filing incorrectly.

Although I'm sure Cheshire Figment will be along shortly with a much better answer.

 

[disneymarie]

Parents pay her the $300 consider $400 to keep peace. I can wonder as with us although dsd had her own off campus apt. We paid child support, rent, clothes, food, medical was carried on her.

The test showed we did provide more then half her support. Otherwise we would cut the child support she received until she was 23.

 

[Cheshire Figment]

Whenever I have clients with college students I will figure the taxes both ways and end up doing what is most advantageous for the family as a whole. In just about all instances it makes sense for the parents to pay the child the difference in the child's tax.

 

[Darcy03231]

I have a college freshman and she lives at home. Her scholarships and a small loan covered her tuition. Since she made over $5700 she claimed herself this year.

 

[Green Tea]

If she has a job and makes more than the alloted amount, I believe of 5,700 per year for a single person/no dependents, then her parent's can't claim her. .

Not true. Kids in college can be counted as dependents even if they have an income. Even if they live away at college, they can be counted as living at home as well.

 

[crisi]

Whenever I have clients with college students I will figure the taxes both ways and end up doing what is most advantageous for the family as a whole. In just about all instances it makes sense for the parents to pay the child the difference in the child's tax.

That was the deal I had with my Dad all those years ago. He'd claim me and then pay me the difference in my taxes. It put $300 in his pocket or so and I broke even on the deal.

However, this means your parents have to be willing to pay you. If they want their cake and to eat it, too, that's an issue. Most college students are pretty broke.

 

[Shmily1]

I have two that are in college and I figure out taxes. I do them with and without and see how it comes out better. Last year, I lost out on $104 but DS21 got $1025 back. It was close to the same for DD19. It was generally the same this year because we make more than the allowed amount to claim the college credit, but they don't. Needless to say, they are now filing on their own and we no longer have children to claim.

I totally agree with the college student.

 

[SoonerSarah]

They did not pay for health insurance, she doesn't have any. All doctor visits were free through campus, the helped with some prescriptions. Didn't pay for any food or clothing or personal care. When she was living with them for the short time in summer she still purchased some of her own food.

As for her job, I'm willing to bet that she made ore than $10,000. I don't know how much per hour she makes, but she usually works more than 25 hours per week and I know she makes more than minimum wage.

Thanks for all of your thoughts!