<p>I have searched this site and can't find anything that quite answers my question so here it is. I have a 19 year college student and she works 30 hours a week at a min. wage job to pay her rent and bills. She lives there all year, but does come home for 2 months during the summer. Her dad and I are considering letting her claim herself on her taxes this year, so that maybe she can get some help with financial aid. Her dad and I make too much money (FAFSA says anyway) for her to get any help, but we don't make enough to pay for her school or really help her in anyway, we have a hard time paying our bills! Claiming her does help us with our taxes. My question is, do I give up the deductions and let her claim herself? I definitely want to do whatever is best for her! Will she even get any help on the FAFSA? I have read that you have to be emancipated from your parents to be considered an independant, is this true? Is anyone else dealing with this? I am so confused! Help!</p>
<p>Last I checked, one has to be 24+, a military veteran, or legally emancipated to not have one’s parents’ incomes count for FAFSA/FA purposes.</p>
<p>In short, having you claim yourself rather than a dependent of your parents probably won’t matter much regarding getting FA.</p>
<p>Here are the rules for being declared in independent student: [Will</a> I need my parents’ information?](<a href=“http://www.fafsa.ed.gov/help/fftoc02k.htm]Will”>http://www.fafsa.ed.gov/help/fftoc02k.htm)</p>
<p>The other ways to do so (adding to Cobrat’s list) are marriage and having dependent children. But that doesn’t mean necessarily getting more aid. From a tax perspective you can work through both scenarios with your D as a dependent or filing for herself and see which gets more back.</p>
<p>Figure it both ways…if it benefits you more, then claim your daughter and pay her what she would have received if she had claimed herself on her tax return. In the end, it makes no difference to your daughter, and you may make a few bucks…everyone wins</p>
<p>Go to the FA & Scholarship forum.</p>
<p>Not a tax expert but the way I read the tax law you can’t claim her as a deduction (whether you want to or not). You have to provide 50% or more of her support to claim her and it doesn’t sound like you do.</p>
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If the college student provides more than 50% of her own supports, the college student may claim her exemption.
Otherwise, the parents claim the college student 's exemption; whether they support her or not.</p>
<p>Don’t forget to include the tax credits for tuition in this calculation. If you don’t claim her but could, I believe that she can use them up her own taxes. If you can’t claim her because she provides more than 50% of her own support, then she can get a tax credit leading to a refund.</p>
<p>We always claimed the kid and then paid him back the difference in the refund he would have gotten if claiming himself. Turned out better for us and the same for him.</p>
<p>For tax purposes, you can’t pick and choose. Either she meets the tests to be a dependent, or she doesn’t. If she meets the tests to be a dependent, she cannot claim her own personal exemption for tax purposes, regardless of whether you claim her personal exemption. If she doesn’t meet the tests to be a dependent, you cannot claim her personal exemption for tax purposes, regardless of whether she claims her own personal exemption.</p>
<p>There are some options available with respect to education credits; if you’re in AMT and your D has an income tax liability, it may come out better for no one to claim her exemption so that she can take the (nonrefundable portion only of the) AOC.</p>
<p>Principal place of abode and support tests are likely the relevant tests. The support test isn’t whether you provide more than half of her support; it’s whether she provides more than half of her own support. Note that expenses paid with loans in her name count as support she provided; scholarships and grants aren’t counted as support provided by anyone.</p>
<p>Financial Aid does not take into account the tax status of a college student. As long as your D is under 24 your income will be considered for FAFSA. As far as her tax status, the tests above are the ones to use. You say that her 30 hours pays her bills and rent. I assume you mean living expenses and that you are paying her tuition? If so, you most definitely contribute more than 50% of her support.</p>
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<p>She doesn’t have to claim her own personal exemption. She can be claimed by noone. </p>
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<p>I believe that this is what I was talking about, but I don’t think you have to be in AMT for this to make sense. I think as long as you’re in the exemption phase out range, it still might pay off to do this. You need to do the math.</p>
<p>Personal exemptions don’t phase out for 2012. You pretty much have to be in AMT for the kid’s AOC to be a better deal than the parents’ tax savings on the exemption and for the kid to still meet the support test to be a dependent. I agree that you need to do the math.</p>
<p>As others have said, it makes no difference whatsoever for financial aid whether your daughter is claimed as a dependent on your taxes or not. She is still a dependent for FA purposes.</p>
<p>Whether or not she can be claimed as your dependent for taxes depends on whether she provided more than half her own support. if she did, you can not claim her. If she didn’t, you can. If you can claim her, it is likely that will be the better deal taxwise overall. We claimed our daughter, but as we benefited from the AOC by claiming her, we paid any taxes she had. But again, she is dependent for FA purposes either way.</p>
<p>Your D is too old to become “emancipated.”</p>
<p>She’ll have to use your info on her FAFSA no matter what you both decide to do on your taxes. She’s a dependent on FAFSA no matter what…unless she marries, turns 24, has a baby that she supports, or is a military veteran.</p>
<p>What about health insurance . Is she currently on yours? If she is I think that would be a good reason to keep her as a dependant. Unless the health insurance companies don’t care…</p>
<p>Thanks for all the great advice. I did not even think about insurance. I am just trying to get her some help with school before she gives up.</p>
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<p>I see, you’re right. The taxes for someone with around $12K of income but no deductions is around $1300 which gets wiped out by AOC. </p>
<p>The value of an exemption is the tax rate time $3800, which about the same amount. </p>
<p>Thanks for clarifying.</p>
<p>Health insurance has no relation to FAFSA or taxes.</p>
<p>I believe paying for health insurance WOULD be part of the test for support.</p>