<p>Hey, I go to Rutgers-Newark University, 21 years old live with mom, stepdad, and sister in NJ. Rutgers costs about 13,000 I believe to attend for the year. I've made $7700 this year, my mother told me she and my stepdad combined have made like 33k. My sister is currently first year at community college and she has received Financial Aid for this past semester already(she only makes like 3-4k a year). 2 people are in college full time currently (me and sis), and my mother is applying for financial aid this year to start school this upcoming Fall. My sisters county college bill is completely paid for by grants, so I know the improved Hope credit wont affect her. </p>
<p>My question looms from Financial Aid covering about 6,000 of the 13000 in tuition, and I took out Federal loans for the rest to buy books and pay for tuition with, I want to do my taxes as soon as possible. I was wondering, would it be more beneficial for my mother to claim me as a dependent on her taxes, or should I do it myself. Since the loans are all in my name, when I do the American Opportunity tax credit will I get the tax credit/refund? And how do I go about applying for that? Bring in a copy of my college's 1098t form I'd assume?</p>
<p>It doesn’t matter who claims you on taxes, as far as financial aid is concerned. You have to file for financial aid as a dependent student no matter what. As far as the tax credit goes, I have no clue. Vballmom probably knows! </p>
<p>Your number in college will be 2. Your mom’s number in college will be 3 if she applies for aid. Parent can include kids; kids can’t include parent.</p>
<p>If you are able to claim your own exemption on your taxes then yes you would be eligible for the tax credit. If you were still claimed as a dependent on your Mom’s tax returns then only she can claim the credit. The new tax credit is partially refundable so even if there is no tax liability (which there will not be if you made $7700 and are able to claim your own personal exemption) you can get a credit of up to $1,000 paid to you. There is no ‘application’ for the tax credit. You get it by doing your tax return.</p>
<p>Ok thanks, so I know that FAFSA will have me under dependent status since I dont meet Independent criteria. For the taxes however, if my mother doesnt put me as a dependent, when i file my taxes, all I have to do is bring the schools 1098t form and then I will receive the tax credit correct?</p>
<p>Now how would I go about finding if it would be more beneficial for my mother to just have me as a dependent on her taxes, any websites that i can input figures to see if it would come out to the same? If it did, I’d rather do it because my mothers credit is bad and i’m scared they will take the money out of her income tax.</p>
<p>The IRS website has links to tax programs such as turbotax that you can use free online as long as you qualify (fairly simple taxes and lowish income). You could do a trial run using that.</p>
<p>I would also suggest you file that way if you are eligible. You keep talking about ‘bringing your 1098’ somewhere. There are lots of places you can file taxes for free.</p>
<p>I’m not sure what you mean by the above. To get the tax CREDIT you must file your income taxes. I’m not sure what this has to do with your 1098. If your parents do not declare you on their taxes, in order for YOU to get the credit, you must file your taxes,</p>
<p>NOW…just a couple of things for you to check.</p>
<p>Neither of our kids were able to do this for one very simple reason, In OUR state, if they were NOT dependents on OUR (parent) taxes, they immediately were removed from our health insurance plan. Our plan provision was clear…it was for DEPENDENT students…not those who filed taxes independently. The cost of an individual health insurance policy was not worth this.</p>
<p>This would have applied to our auto insurance under which they were covered as well as our homeowners which insured the belongings of DEPENDENTstudents away at school only (it insured everything IN our house but only at college for dependents…the tax kind).</p>
<p>We, the parents, also would have lost the kiddos as exemptions when we were clearly paying most of their bills. Even the standard deduction was something we were not prepared to lose without forward planning. This year, for example, we KNEW DS would not be our exemption and adjusted our tax withholding accordingly,…last January.</p>
<p>You might want to look into these things too.</p>
<p>What I mean by the 1098t question is, when i file my income tax as a dependent correct, do i need to have my schools 1098t form that says how much money tuition/etc… costed, and how much of that was payed for with grants, and how much of it i had to take out loans for. Otherwise if I just did my income tax without the 1098t, how would they know how much money was used (out of my own) to pay for tuition that grants didnt cover? In other words, what papers/info do I have to bring besides my jobs W2 forms to the income tax place, for them to get me my tax credit back? </p>
<p>And we dont have any health care plans to worry about. My only concern is that my mother/step dad did cover most of my expenses (in terms of living/food) for the year, and dont know if it would be beneficial for her in terms of deductions…</p>
<p>How much does a parent get for 1 dependent? my sister will still be her dependent on the tax forms however.</p>
<p>Yes you would need to take your 1098t to the tax prep place. However it is pretty easy to do your own tax returns for free and not pay a tax prep company. The software walks you through it. So, unless you have one of those helpful charity groups that will help do your returns for free, check out the freefile link I posted above.</p>
<p>If your Mom claims you as a dependent she gets the dependent exemption of $3700 for you. If you claim your self you get the $3700 amount but it is called a personal exemption. </p>
<p>If your Mom has a tax liability then she will probably get more of a tax benefit than you will.</p>
<p>"If your Mom claims you as a dependent she gets the dependent exemption of $3700 for you. If you claim your self you get the $3700 amount but it is called a personal exemption. "</p>
<p>Thank you, so this 3700 is partially or fully refundable credit? Lets say I do it myself, and claim myself, and i dont owe any taxes, the 3700 would come in my name? </p>
<p>My stepdad and mom will file jointly (as last time they did it separate was a nightmare dealing with financial aid) this year, however my step dad doesnt do anything for me or my sis, since they do it together they get one big check, and my mother doesnt want him to get more then he should for having us as dependents (they have money issues) or half to split their income tax in half, if my mother really deserves more for taking care of me and my sis. I think it might be better off me doing it myself, and then giving her some of the money.</p>
<p>The $3700 is not a credit at all. It is an exemption (nothing to do with education credits). It reduces the amount of income that is taxable. For instance in your case you said you made $7700. If you file a return but your Mom claims you as a dependent then you have a standard deduction of $5700. If your Mom is claiming you as a dependent you do not get the personal exemption of $3700. This standard deduction reduces your taxable income to $2,000. ($7700-5700=2000). So you would pay tax on $2000 (probably around $200). As you are claimed as a dependent on another tax return you cannot claim the education tax credit.</p>
<p>If your Mom cannot claim you as a dependent because you provided more than half your own support then you can claim the personal exemption of $3700 as well as the standard deduction of $5700. So your taxable income would be reduced to $0 (7700-5700-3700 = takes it to 0, not below 0). As you are not able to be claimed pn someone else’s tax return you are eligible for the American Opportunity tax credit. Up to $1000 of the american opportunity tax credit is refundable (meaning you can get $1000 even though you have no tax liability) so you may get a $1000 ‘refund’ from the IRS. The other $1500 of the American Opportunity Tax credit is not refundable (meaning you must have a tax liability for it to reduce) so you would not get that.</p>
<p>If there is just your parents and two kids and your parents claim you they get a standard deduction of $11400 (for married filing jointly, or can itemize if the have certain expenses that come to more than $11,400) plus they get personal exemptions for themselves and dependent exemptions for the 2 kids. So 4 exemptions of $3700. This would reduce their taxable income by $26,200 (11,400 + 3700+3700+3700+3700). As they claim you they can get the AO tax credit. If they cannot claim you but can claim your sibling then they get only 3 exemptions so their taxable income would be reduced by 22,500. As they cannot claim you they cannot get the AO tax credit. They may also have other exemptions or credits. </p>
<p>As a whole family you would probably be marginally better off with your parents claiming you as a dependent. If I were in your situation if it were legal to claim the child as a dependent and would lead to a better tax benefit then I would claim the child and give the child the money they would otherwise have received. However given the issues you mention it sounds like the only way you personally will benefit is if you are able to claim yourself. </p>
<p>If you earned $7700 and paid the balance of $7000 of your tuition and books with loans it certainly sounds like you could qualify to claim yourself on your taxes.</p>
<p>My stepdad and mom will file jointly (as last time they did it separate was a nightmare dealing with financial aid) this year</p>
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<p>Did they both file head of household? That’s the biggest problem we see with our student population. If they both filed head of household, the aid office cannot give aid … we spend hours trying to get people to understand why they can’t do it & why we have to have an amended return if they want their kids (or themselves) to get aid.</p>
<p>Thanks swimcatsmom, you’ve been VERY helpful, I will prolly try the Turbo Tax for this year and do it myself. </p>
<p>My last question is about grants/leftover money from school (school refund checks), I know your supposed to put this on your income tax. So it counts as income? Like as if I had worked and made it? What happens if you dont put the grant leftover income? I’ve never done it…(because i didnt know you had to the last couple years), and this will be i believe my 4th time filling out a FAFSA…I’m assuming once I put the leftover grant/loan money i received on my income tax…wouldnt that mess up my EFC?</p>
<p>Post #12: That’s exactly why we can’t process the aid until the parents file amended returns. We don’t report anyone for filing incorrectly, but we won’t process their aid if they don’t provide proof that they amended the returns.</p>
<p>No, you do NOT list any loan money on your taxes. You only list the amount of GRANT and SCHOLARSHIP aid that exceeds the cost of tuition & fees.</p>
<p>If your refund checks are due to borrowing loans, that’s not income for tax purposes. It’s money you borrowed & have to pay back … in other words, it’s not “your” money.</p>
We don’t report anyone for filing incorrectly, but we won’t process their aid if they don’t provide proof that they amended the returns.</p>