Dependent

Andy writes:

well here is my issue...

i am actually contacting you in regards to my girlfriends current tax situation... to be frank... her mom and step dad are trying screw (for lack of a nicer term) her by claiming her as a dependent (even though we are not totally sure they have the right to do so.)

well here is the situation...

In 2008 my girlfriend (melissa) was attending colorado state university (all housing costs/tuiton/etc) come from student loans in her name. He mom and step dad only cover her car insurance and her cell phone bill, roughly a grand total of about 400 dollars a year... )(her real dad pays for health insurance/spending money/books/ etc...)

she was inrolled all the way up to the final semester when she withdrew, but still stayed in the dorm.)

at the end of the school year she moved back to her mom and step dad's house and continued working where she has been working on and off for the last couple years... she decided to wait a semester to go back to school (she transfered during the summer to a different school in her home town.) but while working she accumulated her own health insurance and in november she moved into her own place.

her mom and step dad are trying to claim her because if they do they get a big enough tax break to take them from having to pay 1000$ to only 100$

at the same time if they claim melissa, she is getting stuck with a 300$ bill to the irs (that they refuse to help her pay) where as if she claims herself she will be getting a 400$ rebate from the irs. not to mention the ramifications on the stimulus rebate posibilities... if they claim her, they will get another possible 300, and she wont get anything, where as she made enough while working in 2008 that she is able to get up to 600$ her self... they are taking this to the point of saying she has no choice, and will not budge at all to help her... how can we avoid her getting stuck...?

thanx in adanvce.

My reply:

Andy,

Whether or not you are allowed to claim someone is a matter of law, not choice.  All 7 of the following tests must be met in order for a taxpayer to legally claim their child as a dependent in 2008:

1. To claim a child as a dependent, the taxpayer (or spouse of taxpayer if filing jointly) cannot be claimed as a dependent on someone else's tax return.
2. The child cannot be claimed as a dependent if he or she files a joint return with a spouse.
3. The child must be either a U.S. citizen, U.S. national, or a resident of the U.S., Canada, or Mexico.
4. The child must be the taxpayer's son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister or a descendant of any of these.
5. The child must have lived with the taxpayer for more than half of 2008 unless they meet one of the exceptions.  The exception that may apply in your girlfriend's situation is that the child is considered to have lived with the taxpayer during the time the child is enrolled in full-time school.
6. The child must be:
1. under age 19 at the end of 2008, or
2. under age 24 at the end of 2008 and a full-time student for any part of five calendar months during 2008, or
3. any age and permanently and totally disabled
   
7. The child cannot have provided over half of his or her own support during 2008.  This is your girlfriend's only hope.  I have attached a worksheet to help her determine if she provided more than half of her own support.
   

If she determines that she is legally able to claim herself on her own return and her parents are not able to claim her as a dependent then that's the way she should file.  She should however warn her parents that she intends to do so.  If both she and her parents claim her they will both receive notices from the IRS asking each of them to explain why they believe they are eligible for the deduction.  The IRS will then determine who they believe is entitled to the deduction and the other person will owe back taxes, interest and penalties.

Best wishes,
Gina

http://GLGcpa.com