std deduction and per.exemption?

Question

if my son, now 15, has a income of 10,000,and filing his own tax return, how does it have impact on my tax return?-can i claim him, if he opt not to claim on his tax return? would i be eligible to claim child tax credit?
if i am an illinois resident, how it affects on my state return? how much amt he would be paying state tax on?

i am eligible to claim him as a dependent, as i have supported him fully and living with me etc provided he dont claim.and if he dont claim on fed1040, he wont be able to claim on il1040 either.
the thing is which one best suites for a family as a whole. if he files his tax return, he would be paying tax on 5000$ @10%,considering he is not contributing to ira and not claiming himself as a dependent. whereas i would be saving tax of my bracket on 5000, but still eligible to claim him as adependent...so can reduce tax liability on3200$ by claiming his exemption.am i getting it right?

Answer 1

he is most likely over the minimum filing requirement for the state. the minimum filing requirement is the amount of income a person has to make in order to be taxable.

to answer this in order that you asked them:

1. generally filing his own return will have no impact on yours at all(unless you claim him)
2. if he claims himself, you cannot claim him. if he does not claim himself(he claims dependent), you can claim him.
3. if you claim him you would be eligible for the child tax credit as long as he meets the requirements for your state.
4. he would be paying tax on the $10000, less the $2000 personal exemption that illinois allows. if you claim him, he will not get the personal exemption.
5. if he claims dependent on the federal, he would have to do the same on the state.

i would say the better for the family would be you claiming him. being that he made such a little amount, his refund/taxes owed, won't be that much. however if you claim him, you will get his exemption, plus the allowable amount for the child tax credit.

below is the contact information for the illinois dept of revenue. if you have any further questions i would contact them and a representative could go into further detail:

To receive assistance by phone, please call 1 800 732-8866 or 1 217 782-3336. Representatives are available Monday through Friday, 8 am - 5 pm. Our TDD (telecommunication device for the deaf) number is 1 800 544-5304.

Answer 2

Unfortunately, the IRS isn't particularly concerned about what would be the lowest overall tax liability for your family. The bottom line is that your son needs to file his own tax return without claiming himself as a dependent. He's entitled to the full standard deduction for a single person, but nothing else. Actually, it wouldn't be a half bad idea for him to open a tax deductible IRA, if you're in a financial position to do so (if he's saving for college, probably not worth the hassle at this point).

Poor kid-he's 15 and already introduced to the monster we call the tax code!

Answer 3

You don't have a choice. He MUST file his own return and you cannot claim his income on yours instead.

Answer 4

Tax laws vary from state to state: your local tax attorney is more qualified to fully answer this one.