What kind of refund if parents claim me as dependent?

Question

I still allow my parents to claim me as a dependent to help them out. This past year I earned about $19k working over 6 months and had federal taxes withheld each pay period. After our accountant figured out my taxes, they claimed that my refund was only minimal (something like $200). Since my income this year was far more than what I've earned over the past few years, and since my parents can be kind of shady at times, I was wondering if they might be cheating me out of some of the refund. I know that being claimed as a dependent reduces your refund amount, but still, something feels off about it given the money involved. I live across the country from them and so I don't know if I'll be able to check out the tax documents without getting into an argument. I don't want to accuse them if it's likely they are telling the truth. Thanks.

Clarification: I am 23 and a full-time student. The money I earned went to paying off my undergrad loans and toward what is now my grad school tuition.

Answer 1

You haven't given enough information to give an absolute answer to your question. How old are you? Are you a full-time student? Are you disabled? What did you spend your income on -- rent, utilities and food or did you party it away or put it in a savings or investment account? All of these items come into play in answering your question.

You can't "allow" your parents to claim you as a dependent. The are either entitled to the exemption under the law or they are not, pure and simple.

If you are under 19 and live at home for more than half of the year, they can claim you as their dependent if they provide more than half of your support regardless of your income. What you do with your income will come into play with the support calculations but is not a bar to the exemption claim by itself.

If you are over 18 but under 23 and a full-time student at a secondary or post secondary institution they can still claim you as a dependent if they meet the support test.

Absenses from home to attend school count as time spent at home for the residency requirement so if you're away at school they may well be able to claim you as a dependent.

They can also claim you as a dependent if you are totally and permanently disabled regardless of your age.

If you are 19 or older and are NOT a full-time student, they can only claim you as a dependent if you lived at home all year and had less than $3,300 in gross income.

Based upon the information above, determine if your parents are legally entitled to claim you as a dependent. If they are not, you should file an amended return and claim your personal exemption. Advise your parents to file an amended return and drop the dependency exemption prior to April 17, 2007 of they will be faced with penalties and interest on the unpaid tax due to the loss of the exemption. If they ARE legally entitled to claim you as a dependent there's nothing you can do but live with the slightly higher tax bills until they can no longer claim you.

Depending upon your total tax situation, your personal exemption is worth between $330 and $495 to you at your income level for the 2006 tax year.

If your parents are not legally entitled to claim the exemption, you should claim it yourself and let the chips fall where they may for them.

Answer 2

You can't "allow" your parents to claim you - they are either eligible to claim you, in which case they don't need your permission, or they aren't. At this point they are claiming you illegally - if you didn't live with them for over half the year, you are not their qualifying child, and you made far too much income to be a qualifying relative. It might be a good idea to let them know that, if they don't already, before the IRS brings it to their attention.

That said, the only affect that their claiming you has on your taxes is that you don't get the $3300 exemption for yourself. You'd most likely be in a 15% bracket, so not getting the exemption would cost you about $495 in taxes. Also, if there were any education credits for you for 2006, they'd have taken them rather than you getting them.

Your refund amount doesn't tell you anything - it's just returning your overpayment, what was withheld that didn't need to be. It's your total tax amount that counts.

Answer 3

First of all, in order for your parents to claim you as a dependent, the following requirements have to be met:

~You have to have lived with them at least 6 months during 2006

~They had to have provided at least half of your support in 2006

~You had to be under age 19 at the end of 2006, or under age 24 if you are still a student.

If those situations don't apply to you (does not sound like they do since you live across the country from them) you should be claiming yourself and they should not be claiming you as a dependent! I don't know how much of a refund increase you will get by claiming yourself, but I do know that I would question my parents and ask them what they are doing---tell them you need to know if they are still claiming you so you will know how to file your taxes accurately. If by chance they are and they should not be, you will probably have to paper file your tax return (if you efile it will get rejected if they are claiming you as a dependent and you are claiming yourself) and the IRS will probably flag both returns and your parents will have to prove that they can still claim you as a dependent........

But, all that may not be necessary if they can still legally claim you, but I really doubt it based on the info you already provided.

Answer 4

Unless you are a college student under the age of 25 and your parents provided at least half of your support your parents shouldn't still be claiming you. I'm guessing that if you made nearly 20,000 that is not the case.

When you file you get a standard deduction and an exemption. If someone claims you you lose the exemption, so that's 3300 of extra taxable income for you which works out to about $500 you lose from the taxes you paid throughtout the year.

I don't know how much you had taken out, but had you claimed yourself your tax bill would have roughly been 1583. Since you allowed your parents to claim you it's roughly 2078. Plus if you have any interest or dividend income it is all taxable if you are claimed by another person.

Question, if your parents are "shady" why do you allow them to claim you if they don't support you?

Answer 5

Since your parents claimed you falsely....THEY will likely suffer the consequences for filing with you as a dependent when you do not reside with them. I would go ahead and file properly for your self and let your parents worry about what they will have to do if audited. Paying for your health insurance and car insurance doesn't count...Is the car titled in your name?

Answer 6

Marine Mom is right ! If you made 19k, they didn't provide over half of your support, so really they can't claim you, you should be claiming yourself !!

Answer 7

if someone claims you, you are gonna get the shaft on your refund. tell your parents not to claim you this year, or when the person who does yours asks if anyone claims you as a dependant lie. Making such a small amount of money, the IRS isnt gonna be looking into you.

Answer 8

Take your taxes to your own person. Then tell them they are unable to claim you becuase you plan on going to school and you will need to be able to show you are independent to qualify for financial aid.

DO YOUR OWN taxes!!