Tax Question?

[lostkiwi]

Not sure where this should go, (probably in the Disaster forum.. ) but I'll try here.

Okay, I do our taxes, no problems. However, I don't know how to put our 18 year old on this year. He turned 18 at the end of November and graduated in June 06. He lives with us, so do I count him as a dependent? Of course we don't get the child credit for him, so I don't know if it is okay...because.. he has been working, his gross was only around 6K, so if I do a return for him he gets everything back. However there is a question on his return that asks if he can be claimed as a dependent on someone else's return, which reduces his by about $172.

Any suggestions? Help? All of which would be greatly appreciated!
Thank you so much.
Susan

[Bob C]

Okay, I do our taxes, no problems. However, I don't know how to put our 18 year old on this year.

Do these help?

http://www.irs.gov/publications/p501/ar02.html#d0e3270

http://www.irs.gov/taxtopics/tc354.html

[ChattyCathy]

I counted my kids as dependents up until they were 18 - and longer - I think it's up to age 23 if they are a full-time college students and living with you.  Since your son didn't turn 18 until 2006, I would say that he can be claimed by you, but when he does his taxes, he has to put down that someone else claims him.  He won't be happy, but it's more of an advantage to you than to him - and he'll probably get most of his money back anyway.

I'm no tax expert, but I've been going to the same tax lady for over 20 years and she's been doing it that way.

[Chesslike]

lostkiwi, Bob C gave you some pretty good links to use. As you can see, it is pretty much up to you, who claims the personal exemption. Usually, because the parents are in a higher tax bracket, there are more tax savings if the parents claim the child as a dependent and the child checks the box on their return that they are being claimed as a dependent on another's tax return.

[lostkiwi]

Awesome!

Thank you Cathy, Bob One and Bob Two! 

I'll go look at the IRS pubs, (thank you for the links) but it looks like having him say he is being claimed as a dependent by us is the way to go. Sometimes it helps to have friends give advice instead of just reading the tax forms.

(I use TaxAct Deluxe by the way, it is very good and comes with JD Lassiter (off the top of my head) tax help.)

Susan

[SpeedRacer]

It's always best to consult a tax professional. 

[Surfer_Dude]

Lostkiwi, the longer he is a dependent the longer he will have to wait to get financial aide in some cases for college.  One needs to check all the angles.

[lostkiwi]

Argh!
Thanks SurferDude.
He has signed up for online classes at VVC but won't start until summer, seems all the spring classes are taken and as he works full time...
He is doing Honor's English, (and a couple of other classes) he nearly fainted when he got a 97% on the placement test, but for now he is happy to do that, later he may transfer to another college. I'm hoping we can beg or borrow books for a while, don't know what we need yet.

Jeez, they always find a way to mess with you, no?

That's it. I'm buying one of those limited raffle ticket thingies. 

SpeedRacer: But of course! 

[ChattyCathy]

College books - what a joke that is!  My son used a previous edition Calculus book than requested, and he found that after the first few chapters, the book was exactly the same as the required book!  Make sure to check at Amazon and half.com - and there are other sites for used college books that may cut the cost, and then maybe he can re-sell the books online when he's done with the class - it all helps.  If a new book is absolutely required, you're going to be shocked - sometimes well over $100 for a textbook!

I'm hoping we can beg or borrow books for a while, don't know what we need yet.

[lostkiwi]

Yikes!

Time to do that home equity loan... 

I thought I might try Freecycle too, they can often come up with all sorts of things you are looking for.

Talking of which, I bought my first eBay item yesterday, I was looking for a magazine from 1992 and thinking what are the chances... Well I found it, for $3 + $3 shipping, I am very impressed. Not doing the PayPal thing though. Uh uh.

Thanks Cathy for the info, I will make sure to check out the sites.