I was audited for 2005 and owe additional tax; however, in re-examining my return, I realized that I filed as a dependent when in fact I was not. I called my parents and found that they had claimed me in 2005 - this is incorrect. I did not live with them for half of the year and did not receive assistance from them; I was in school full time but my income was 20k. How do I rectify this? If I change my status and assert that they were incorrect (which will lessen my tax burden), will they be audited?
2007-06-29 02:45:32 · 4 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
If you change your filing status and prevail, your parents are going to have to pay back at least $1,300 in tax, and probably more than that. If they are low income and claimed the Earned Income Credit, they will have to pay back more than that. By lessening your tax burden, you increase theirs and cause family strife.
Even though you made $20,000, if you were under age 24 and a full-time student, and did not provide over half of your own support, your parents can claim you. You did not have to live in their home for six months for them to claim you. Absences to attend school do not count as time away from home.
Support is not the same as income, or even money spent. Whatever you saved instead of spent is not support. If your parents paid for your college tuition, or borrowed money to pay for your college tuition, that is support. Worksheet 3-1 in IRS Publication 17 will help determine whether you provided over half of your own support or not.
Why you owe additional tax, and the amount of that tax, will be a factor in determining whether you want to proceed with trying to change your filing status. It generally is not worth the problems it causes.
2007-06-29 03:09:43 · answer #1 · answered by ninasgramma 7 · 0⤊ 0⤋
Without all of the information on your parents' dependency claim it's not possible to evaluate if their claim was valid or not. Temporary absences for school count as time spent at home for the purposes of meeting the 50% residency rule. Also, how much of your $20k income was used for your direct support vs any support paid by them or considered to be paid by them determines if they met the support rule. Merely earning that much, in and of itself, doesn't mean that they didn't meet the support test.
If you amend your return and claim your personal exemption the IRS will contact both you and your parents and ask for proof of the exempton claims. They'll then decide who gets the claim based upon the law and the information provided.
2007-06-29 02:57:25 · answer #2 · answered by Bostonian In MO 7 · 1⤊ 0⤋
You will need to file an amended return - a 1040X. Your parents will most likely find out if they file and claim you, because you are already claimed (by yourself). So, I would just wait to see what happens with your folks' return. Sorry, but that's the way it is. I'm sure they've filed since today is the deadline.
2016-05-18 21:51:07 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Speak with a H&R Block represenative or call the IRS and ask.
2007-06-29 02:49:13 · answer #4 · answered by tosha38401 3 · 0⤊ 3⤋