How do I figure out who I'm dependent on for taxes?

Question

It's the first time I'll be doing my taxes, but it's a little more confusing than that. I'm currently not speaking with my father, who claimed me last year even though I was living on my own. Financially he has me on his health insurance, but that's the only dependency I have on him. I've moved in with my mother, who hasn't been in my life since I was younger and now she is taking care of some of my financial needs.

My question is.. is it better for me to file as independent, or dependent?

Answer 1

You don't get to choose whether you are a dependent or not.

Did you provide over half of your own support? Then you are not a dependent and should file your own return and claim yourself.

If you did not provide over half of your own support, then the next consideration is your age.

1. If you are under 18, or under age 24 and a full-time student, then you would be claimed by the parent with whom you lived the longer period of time.

2. If 1. does not apply, then if you have income subject to tax of $3,400 or more, you cannot be claimed as a dependent. File your own tax return and claim yourself.

3. If neither 1 nor 2 apply, then you are a dependent of the parent that paid over half of your own support.

Answer 2

The question is NOT "is it better for me to file as independent, or dependent?"

This is because it's NOT a choice. It's a test. Either you are a dependent or you are not. Go read IRS publication 501 and figure out if you are a qualifying child/qualifying relative for either of your parents. If not, you're not.

When I was in college, there were years when I was making good money from internships. I had also taken out student loans so I was paying a lot of my own bills. Each year, my dad and I would figure out my true support costs (there is a worksheet in the publication 501). This wasn't to show me how hard it was to be an adult--it was to figure out if I was supporting myself or not for tax purposes.

My father wanted to legally claim me on his MFJ return (and his insurance) and have the records in case of an audit. So if I was anywhere near supporting myself, I would move my money to savings and an IRA while Dad would take over my expenses. My exemption was worth a lot more on his return than it would have been on mine.

If you discover your dad erroneously claimed you in 2006, you should amend your return.

Answer 3

For you, yourself, it is better to file as independent; that way you can claim an exemption for yourself and owe a bit less tax. Each person has a personal exemption -- if someone claims you as a dependent, then they get that credit, but you cannot. Your father likely wants to keep claiming you as dependent if he can, since then he can claim the exemption for you, but it sounds like your mother might be the one who would be able to do so, not him.

There are other restrictions on being able to claim dependency: some include,

the dependent cannot claim other dependants or a personal exemption on their own taxes;
the dependant must not have provided more than half of his or her own support for the year;
only one person can claim that dependent.

There's more details on the age, relationship, residence, and income of the possible dependent; you'd likely want to check that to see what would apply in your case (see link below).

Answer 4

If you lived with your mom for over half the year, and you didn't provide over half of your own support, and you are under 19 or under 24 and a full-time student, then your mom can most likely claim you. If you didn't live with your dad at all this year, then he can't even if you meet the other rules for him to claim you.

So if your mom can't claim you, sounds like you can just claim yourself - since you don't give your age or whether you are a student, can't give you a definite answer.

Talk to your dad to let him know that you are claiming yourself, or that your mom is - if he claims you also, both people making the claim will end up with large amounts of IRS paperwork, and one or the other will be disallowed and have to pay money back to the IRS. I know you said you aren't currently speaking to your dad, but maybe it's time to get over that.

Answer 5

One person = one exemption. If you claim yourself, your mother and father can't use you as a dependent, and vice versa.

Which is technically correct? Read the qualifications in the 1040 instructions, and figure out where you fall.

If you really can't communicate with your father long enough or civilly enough to work it out, the safe way is to not claim the exemption for yourself. If BOTH of you do, that's a red flag for an audit for both of you.

My son moved out this year, but for the several years before that, we went back and forth, depending on how the numbers worked out each year.