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When did you stop claiming a dependant?

2,893 Views | 18 Replies | Last: 9 mo ago by 12thMan9
wcb
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AG
My son graduated high school in June. Haven't looked at full numbers but he probably made between $10k and $20k this year. He'll for sure be filing his own taxes for 2024. Just wondering what the threshold was when you stopped claiming one.
Troglodyte
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AG
I'm not a tax savvy guy, but my 18 year old (freshman in college) is filing on his own this year in order to get the American Opportunity Tax Credit.
2wealfth Man
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AG
outside of claiming credits, it doesn't really benefit you to claim them. If your income phases you out of the credits then that makes it a no brainer. There is no longer a tuition deduction and I assume some of the funds for education expenses come out of a 529 plan.

Also, make sure your kiddo is doing a Roth IRA contribution even if you have to gift him the $6,500 contribution.
P.H. Dexippus
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AG
2wealfth Man said:

Also, make sure your kiddo is doing a Roth IRA contribution even if you have to gift him the $6,500 contribution.

Step one is said kiddo has to have earned income from the year of course.
Mas89
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AG
For 2023, what is the deadline to make the kids 6,500 Roth IRA contribution.
Ham Slice MRE
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AG
I don't know your situation but I would caution this approach. It could work under certain circumstances but you should be careful.
2wealfth Man
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Mas89 said:

For 2023, what is the deadline to make the kids 6,500 Roth IRA contribution.
tax day; April 15 2024
rgm97
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Be sure to read the instructions on dependents and the credits, etc. you intend for the child to claim. Many of the credits, deductions, etc. use language that say if someone can be claimed as a dependent not if they are claimed as a dependent. So the parent simply choosing not to claim them does not automatically make them eligible for the tax benefits. They have to qualify as not being a dependent separately from simply not being claimed.
wcb
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AG
I was told recently that if we claim him he loses the standard deduction. I'm using TurboTax (super easy, he has two w2's). I've toggled the "is anyone claiming you as a dependent?" option both ways on his return and nothing seems to change.

Is there anything I'm missing?
JustPanda
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AG
If you gift him the $6,500 it isn't earned income and doesn't qualify for a Roth IRA. Now, if you have a FLP, the FLP could make a distribution which would qualify as income but as written, you're breaking the law if you gift and invest into a Roth w no actual earned income.
JustPanda
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AG
Same as every other year? The 2023 cutoff is Tax Day 2024.
mbrooking
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AG
When you are contributing less than 50% of support
jamey
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AG
Can't you still claim them as a dependent even if they file their own taxes?

My stepdaughter lives with us, works and will.be going to JUCO
JustPanda
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AG
Yes but they have to have less than 50% support on their own and if you are a dependent on another person's tax return and you are filing your own tax return, your standard deduction can not exceed the greater of $1,250 or the sum of $400 and your individual earned income.
jamey
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AG
JustPanda said:

Yes but they have to have less than 50% support on their own and if you are a dependent on another person's tax return and you are filing your own tax return, your standard deduction can not exceed the greater of $1,250 or the sum of $400 and your individual earned income.



Less than 50% support on their own? She lives with us, she doesn't pay any rent, electricy or anything and about 75% of what she earns goes into a savings account for future college money and she uses the rest for gas, she probably goes out to eat with her boyfriend some..etc.

We do use TurboTax
JustPanda
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AG
Sounds like she's a dependent
wcb
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AG
JustPanda said:

Yes but they have to have less than 50% support on their own and if you are a dependent on another person's tax return and you are filing your own tax return, your standard deduction can not exceed the greater of $1,250 or the sum of $400 and your individual earned income.
That's what has me confused. I toggled the "is anyone else claiming you as a dependent" on his return; he seemed to get the standard deduction either way.
one safe place
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JustPanda said:

If you gift him the $6,500 it isn't earned income and doesn't qualify for a Roth IRA. Now, if you have a FLP, the FLP could make a distribution which would qualify as income but as written, you're breaking the law if you gift and invest into a Roth w no actual earned income.
How are you going to have the FLP distribution be earned income?
12thMan9
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AG
I pay his bills, he's my dependent.
Ronnie '88
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