NEED HELP: Independent vs Dependent Status For Filing Taxes

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iamlily
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NEED HELP: Independent vs Dependent Status For Filing Taxes

Postby iamlily » Mon Feb 08, 2010 10:11 pm

Hi everyone,

I'm pretty new here but I've been reading GRS for a while now trying to get my financial life organized. I was a full time student for the first half of 2009 and was working the other half. My parents want to file me as a dependent for 2009 but I want to file with independent status because I believe that way I could maximize our deductions. Would my parents get more deductions by filing me as a dependent or would I get more benefits by filing independent status? Any advice is appreciated! Thanks in advance! :)

Three notes:
* I am 23 turning 24 this year.
* I have 2 student loans with paid interest that I/my parents? can deduct.
* I made only $5200 in 2009.. :(

shara
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Re: NEED HELP: Independent vs Dependent Status For Filing Taxes

Postby shara » Thu Feb 11, 2010 1:17 pm

Your parents should claim you. You are in the lowest tax bracket and will therefore get next to nothing back on your taxes. Therefore you will get AT MOST 10% of that money back. Your parents will get more based on their highest marginal rate. And likely with other deductions you will owe nothing in the end, in which case the standard deduction will do nothing for you.

If you're confused then fill out your tax form without the deduction then with. Have your parents do the same thing. It's a simple change so it shouldn't take long for you to see the difference, especially since you will be doing the 1040EZ. As long as you're semi-competent with a calculator you can do it in 5 minutes.

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TheWealthSquad
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Re: NEED HELP: Independent vs Dependent Status For Filing Taxes

Postby TheWealthSquad » Wed Feb 17, 2010 7:04 am

Shara hit the nail on the head. The only way to truly answer that question is to do it both ways. I would be willing to put lunch on it being a better deal for the total (your return and your parents return) for them to claim you.

Don't forget about the Making Work Pay credit (Schedule M) and the education credit you may qualify for since you were a full time student in 2009.

Rarely does it make sense for a full time college student to claim themselves. I did in college but was also working full time and making close to 20k a year so there are exceptions to every rule.

Let me know if you have any specific questions. I would be happy to help you with them.


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