Tax Exemptions?

Question

I have a question about my tax exemption status.
Hi. I am 21 years old and I am a full time student, my parents still claim me as a dependent.
For the summer I'll be interning at a company. I've always heard that if you make less than $8,000 per year, you don't have to pay Federal income tax. Is that true?
What if I make more than $8,000 a year, but less than $12,000, do I still qualify for exemption status?

Thanks for any help!

Answer 1

Ninasgramma's right. If you're still considered a dependent and all you have is earned income you could make only $5,150 in 2006 without having to file, $5,350 for 2007. If you have unearned income (interest, dividends, etc.) the limit was $850 in 2006, probably a bit more for 2007.

If they're still claiming you as a dependent, you lose that exemption on your return. You can't claim yourself if someone else does. If you make somewhere between the $8K & $12K (say 10K) your tax is only going to be about $500. You should have more than that withheld if you file single and 0, which is your only choice. For example, if you get paid weekly your withholding is $14/week ($728 for the year) at single and 0, so you "should" get a refund. Whatever you expect your income to be, as long as it's less than $13,176, your tax is going to be your income minus $5,350 times 10%.

Check out the IRS website at www.irs.gov, click on forms and publications, then click search by publication. Find publication 15, Employer's Tax Guide and you can see how much you will have withheld for each pay period (charts start on page 39). To see how much you'll owe, search for 2007 (or 2006 if they're not available) tax rate schedules within the IRS website.

Hope this helps!

Answer 2

If you're a dependent, for 2006 the limit where you didn't owe tax was $5150 - it'll be a little higher for 2007, but not much. The limit for 2006 if you were NOT a dependent was $8450.

In any case, if you're making closer to $12,000, you'll owe some tax and are NOT allowed to claim exempt on your W-4. Even at $8000 the answer would be the same for a dependent.

Answer 3

If you make more then 5,000 for the year you are required to file a tax return. If your parents claim you as a dependent you can not claim yourself. Your normal standard deduction plus your exemption would be 8,450. When you can't claim yourself it lowers to 5,150. (2006 tax form numbers) Anything over this amount you will have to pay taxes on. It is still smart to fill out your w-4 to claim zero. If you pay in tax at the right rate you will not owe. It is always best to check both returns (your and your parents)before either of you file to make sure that them claiming you does not hurt your tax return (make you owe)

Brandy with Liberty Tax Service

Answer 4

Your information is not correct. If you are still a dependent, and you have only wages (no investment income), then you can make $5,350 and not pay income tax.

So just fill out your W-4 as "single" and "none". You may get a little refund back, but you need to withhold some taxes if you are making the money you mention in your question.

Answer 5

The first answer is correct, if you claim yourself. According to you, your parents claim you. Therefore, the amount you can earn in 2007 is $5,350. This is the standard deduction for a single person.

Answer 6

The personal exemption on the EZ is now $8450 for a single taxpayer. Meaning that if you make under that (unless you have serious interest income or something), you won't owe any taxes.

As always, consult a tax professional for accurate, up-to-date advice. I'm not one. :)

Answer 7

The first answer is correct. Try the IRS website - it's all easily accessible on line.