Supposedly I can't earn over $8000 in a year or else I can't claim dependency on my income tax. Why?

Question

I can easily earn double that in a year, and this is the only thing holding me back. My parents are having a hard time explaining it to me.. I doubt they understand why, themselves. I want to know why because, honestly, it's really pissing me off. If someone knows how all this works, it would be very much appreciated.

Answer 1

There are two cases to consider.

First, assume you are either under 19 or under 24 and a full-time student. Then the limitation on your income so that you are still a dependent is that you cannot provide over half of your own support. You could earn well over $8,000 a year, and as long as your parent(s) paid for over half of your support, they could still claim you as a dependent. You could even make more than your parents, and as long as you invested that money and didn't use it for your own support, your parents could still claim you as a dependent.

The other case is that you are at least 19 and not a student, or age 24 or older. In order for you to be a dependent of your parents, you would have to earn less than $3,400, and your parents would have to provide over half of your own support.

As far as when you can claim yourself: You can take your own personal exemption as long as no one else can claim you as a dependent.

Answer 2

Will you be under 19 at the end of the tax year OR will you be under 24 at the end of the tax year and a full-time student?

If the answer is, "yes", then the amount you earn is not a deciding factor in who can claim you as a dependent. Your parents can and should claim you if you lived with them for at least 6 months AND you did not provide for over half of your own support.

If the answer is, "no", then if you had a gross income at least $3,300 ($3,400 in 2007) for the year, then no one can claim you except yourself. I'm not sure where the $8,000 came from.

Clarifications:

Support - amount paid for your clothing, entertainment, food consumption, living quarters, education, etc. If it isn't obvious who pays for these things, you may have to work out the numbers carefully. You can earn $8,000, but if you put most of it in the bank and don't use it for your own support, then it can be very likely that you don't pay for over 1/2 of your support. It doesn't matter who pays for the other 1/2 of your support as long as it isn't you. For example, you parents can claim you if you are 18 and you paid 40% of your support and your aunt paid for 55% and your friend paid for 5%. The qualifying condition is that you didn't pay for 50% yourself.

Student - to be considered a student, you must attend school full-time for some part of 5 months. That means if you graduated in April, you don't technically qualify. If you graduated May 2nd, you do qualify.

Gross Income - income from all sources including earnings and investments. Include unemployment, interest, gambling winnings, etc.

Like another answerer said, it isn't the end of the world if your parents can't claim you. As you earn more and more money, it makes sense to start claiming yourself.

Answer 3

Your info isn't correct. I assume you are saying that your parents wouldn't be able to claim you if you earned over $8000. That's not true. There are a number of rules on whether or not they can claim you, but whether or not you make over $8000 isn't one of them.

If you are providing over half of your own support, or you are over age 18 and not a full-time student, or over age 23 even if you are a full-time student, or you didn't live with them for over half of the year, then your parents can't claim you as a qualifying child - otherwise they can.

If you can't be claimed as a dependent qualifying child by the rules above, the only other way to claim you would be as a qualifying relative, and if you make over $3400 for the year they wouldn't be able to claim you that way either.

Answer 4

Your parents can't explain the dependency rules to you, because they don't know the rules themselves. Even if they were correct (they aren't), the net affect of claiming you on their return is less than $1,000. You would ALL come out ahead if you earned the extra $8000 and GAVE them $1000.

Answer 5

YOUR QUESTION IS A LITTLE CONFUSING----YOUR PARENTS MAY CLAIM YOU AS A DEPENDENT,WITHIN CERTAIN GUIDELINES BUT YOU,YOURSELF,CANNOT CLAIM YOURSELF AS A DEPENDENT.