<p>SteveMA I am not sure what you are saying in post 14. I am aware exemptions are at a flat rate but it still would be better for her parents if they can claim her. The exemption will mean more to them since their tax rate is most likely higher.</p>
<p>Her income is also high enough that if her parents claim her, they may zoom into a higher tax bracket and increase their tax liability. I’d probably crunch the numbers both ways if it’s really close to 50%.</p>
<p>2016Barnardmom- both returns should be done both ways. It is really easy to do.</p>
<p>2016 barnardmom, her income can’t push her parents into a higher tax bracket. If anything, their ability to claim her would reduce their taxable income, and their tax bracket.</p>
<p>If her tuition and fees for the year (that they paid), plus her share of any lodging and food they provided until she started working exceed $16,000 she earned (and actually it could be less if she has saved any of that $16,000 and not used it toward her own support, per IRS rules), then they can and should claim her. In fact, if they can claim her, she is not entitled to claim her own exemption because they can (the question on her return is whether anyone else CAN claim her as a “qualifying child”)</p>
<p>If they claim her, she still files her own tax return, and pays taxes, but as a dependent, in which case she does not claim her own exemption. Her income it taxable to her, never to her parents. Since they are likely to be in a higher tax bracket than her, it is of most benefit for them to claim her.</p>
<p>Steve - what’s your beef with H&R Block? The Second Look program is actually a great program for someone who thinks they have completed their return correctly, but wants to make sure, and it is free.</p>
<p>Good to know. This will be the first year my D has any income of her own. I thought that it used to ask me if she had income too, but she never has. My taxes are going to be so much more complicated this year than they ever have been before. I’m not looking forward to it.</p>
<p>
Your accountant doesn’t have to be in the same city to be helpful if it’s someone you’d trust. We do returns for people all over the world. </p>
<p>TT is fine for people who have an idea of what they are doing and I would recommend it over doing it by hand. At least it asks questions you may have not though of or remembered. But for people who have no idea, I would recommend having them done by a professional who can talk you through the system at least once. But find someone who has the time and the patience to explain things. If you don’t understand the system, you can’t do things right. I often get kids who can’t understand why they don’t get to deduct the money they gave to church or don’t think the tuition they paid for a course would count for anything.</p>
<p>CTScoutmom–my beef with HR Block is that the people that are doing the “second look” aren’t qualified to do your taxes in the first place and it’s a marketing scheme to get people in the door for them to pay more money to HR Block. If you use Turbo Tax or other similar, you have the option of having them represent you in an audit and you can have someone, a CPA, review them as well. For the OP, her taxes are simple. Most likely she will even be able to file the 1040EZ this year, which, with a W-2 in hand takes about 5 minutes to fill out by hand–and most of that time is putting your name and address on the form. Even a standard 1040 takes about 10 minutes if you don’t have to fill out any schedules, which the OP most likely will not.</p>
<p>I have worked in tax administration for over 30 years. Some of the H and R Block reps I have met knew more income tax law than the reps from the big accounting firms. Some were awful but there are also private accountants that do not know what they are doing. It does not matter how much money they make either.
You need to be a wary consumer.</p>
<p>tom - exactly. This is also the case with private tax preparers. At least if you go to one of the big companies, they will stand behind you. I an H&R Block preparer makes a mistake on your return, they pay the penalties and interest, not you. If you have any doubt about your preparer (from any paid company or independent) ask for their credentials. It’s not required until next, but look for someone who is an Enrolled Agent, or a Registered Tax Return Preparer - both have to pay IRS exams, and are qualified to represent you before the IRS (so are attorneys and CPAs, but they may or may not specialize in taxes).</p>
<p>If the OP claims herself, I would assume she will take some sort of education credit or deduction, and with thus not use a 1040EZ. If her parents claim her, then yes her federal return should be simple. It’s the interplay between the two state returns that could be tricky, since she is a part-year resident in both, and they may be some interplay between the two state returns.</p>
<p>SteveMA, there is nothing wrong with getting a 2nd look at HR block. After all, I correct Turbo Tax returns all the time after they get IRS letters from the screw ups. What I suggested is that she get a free 2nd opinion.</p>
<p>I am an EA, and train people to do take the RTRP. I am not unprepared or unintelligent. Of course when the IRS letter comes from a turbo tax return, I am happy to take someone’s money to correct it.</p>
<p>CTScoutmom - That happened once with my mom, when using a private tax preparer. They screwed up and gave her two thousand too much in returns, and the following year she ended up owing money because she ended up having to pay back the money she had been given wrongfully. They only offered to reimburse her for the tax preparation.</p>
<p>" After all, I correct Turbo Tax returns all the time after they get IRS letters from the screw ups. What I suggested is that she get a free 2nd opinion.</p>
<p>Are there areas of income taxes that turbo tax doesn’t do well? Or are the problems more random?"</p>
<p>dstark the biggest issues that I see are people claiming credits that they don’t deserve and taking itemized deductions that they miscalculate. Mortgage interest in boats, pole barns, two houses etc is common. Divorced parents sharing benefits is another big weakness of Turbo Tax. </p>
<p>When I do 2nd looks and need to amend returns Turbo Tax is the biggest offender, followed by CPAs that haven’t kept up with the tax laws.</p>
<p>Ok, thanks.</p>
<p>How is turbo tax with k1s and with required retirement plan distributions when a taxpayer is older than 70 1/2 or whatever the age is?</p>
<p>^^thats not a Turbo Tax weakness, that is a user weakness…they would have the same weakness if they used H & R Block online too…I’ve heard way more horror stories about other tax prep services then Turbo Tax…</p>
<p>SteveMA, that is the problem with user error, but software be written to make those errors more clear. And THAT is why a second look is a good idea.</p>