I have a full ride and over 13k after tuition in scholarships. I am 18. Can i file my own taxes. My parents don’t qualify for education tax credits and their tax bracket will be much higher than mine since I do not have any other income.
You are going to have to file your own taxes with that much “income” (13K for room, board, and other non-QEE expenses). However, the kiddie tax is going to kick in and you’ll pay taxes on the amount at your parents’ rate anyway. The tax software will guide you through the process.
You can be claimed by your parents as a dependent on taxes, unless you provided more than 50% of your own support.
Scholarships cannot be counted as part of support.
You can deduct from your total scholarships or grants received in 2017 any amount paid for tuition, qualified fees, and books.
The rest is taxable income to you.
When I file separately do I need (or the tax software ) my parents income . Is it not necessary to compute the taxes I owe which i think is referred to as kiddie tax . Is it possible for parents to not show me as dependent and I file my own taxes . (Assuming parents don’t qualify for education credit)
Your parents either qualify to claim you as a dependent, or they do not. It depends on support rules. If you didn’t provide more than 50% of your own support, then they can claim you, and they should.
If they choose not to claim you, even if they can, you still can’t claim your own exemption.
Yes, if kiddie tax is due on your net unearned income, you will need to provide the taxable income from a specific line on your parents’ tax return form so that kiddie tax can be calculated on form 8615.
So your parents will need to do their tax return for 2017 before you can do yours.
If necessary you can file for an extension. Then maybe you can work this summer to earn some money to pay the tax due on your return.
We give our D the money she owes due to kiddie tax on her return, because her scholarship saves us a lot of money.
I don’t know what your parents’ tax rate is, but if they claim your exemption which is worth $4,050 for 2017, then they save on their tax bill, and might give you that money.
For example if their tax rate is 33% then they save $1,336 by claiming you as a dependent.
If you have $13,000 in taxable scholarships (did you subtract tuition, fees and books from your total scholarships?), and no other income, then as a dependent you would get a standard deduction of $6,350 and then your income subject to kiddie tax would be $6,650.
An extension allows you to file up to 6 months later, but it does not let you pay later. An estimate of the amount due must still be paid by the regular due date; if that doesn’t happen, there will be penalties and interest for not paying on time.
Yes, that is correct. It would be better to file and pay by the due date. Hopefully your parents don’t plan on filing an extension and will help you pay your tax due.