ohlollipop

I was just wondering whether it's better to file taxes with your parents, or file them independently. Or if there even IS a better. I heard from one of my dad's friend's at work that her son filed his taxes independently from his parents and that it made a difference. Then somebody told me that it does NOT make a difference, and that I should do whatever I want.

Also, I know that whether or not you file your taxes independently does not influence your "independent" status when it comes to filing your FAFSA (the whole thing with not being able to be independent unless you're married, in the army, etc.).

Does anybody know?

xiggi

You can be dependent for FAFSA and independent for the IRS. The criteria are different.

It's impossible to say which one is better because it depends on the tax situation of the parents and the amount of taxes dues.

msmayor

There is no deciding whether to file with your parents or without...if you, as an individual, have enough earned income to require filing a return then you file a return yourself. You don't combine your income with your parents.

The decision to be made comes down to who gets to take the personal exemption...you, or your parents...in other words who gets to 'claim' you as a dependant. Only one of you can take that claim and in more cases than not, it makes far more financial sense to let your parents take the deduction as they are generally in a higher tax bracket than you as a student would be.

swimcatsmom

You should file your own tax return. As a single filer you have a standard deduction of $5450 meaning your first $5450 of earned income is tax free. Your parents can still claim you as a dependent and get a $3500 exemption for you (if your are in college and provide <50% of your support). If they are not able to claim you as a dependent you get the $3500 in addition to the $5450.

My kids have filed their own taxes since their first summer jobs when they were 16.

ohlollipop

Thank you!

JiggazWifey

so they didn't file exempt?? did you still claim them on your taxes?

swimcatsmom

We claimed them in the years they were our dependents according to IRS rules. We did not claim them in years when they were not.

Parents can still claim a dependent exemption ($3700 for 2009) if their child qualifies as a dependent. If the student is a dependent on their parent's return the student cannot claim the personal exemption of $3700 themselves (the parent instead gets to claim a dependent exemption). The student files their own tax return and gets the standard deduction ($5700 for 2009 unless there is unearned income).

swimcatsmom

Just realized I got the exemptions $# wrong. Personal and dependent exemptions are $3650 for 2009.