<p>My h and I have come to the conclusion that we should really try to get our tax return done before doing the financial aid forms.</p>
<p>However, I'm trying to figure out if dd should file a tax return and, if so, how it affects our taxes. She made a few thousand dollars in 2006, so does not HAVE to file. However, since she paid federal taxes, I would think that if she filed, she would get a refund.</p>
<p>But if she files taxes, can we also claim her as a dependent on our taxes? By filing her own taxes, does she claim an exemption that would go to the family?</p>
<p>We have to figure this out before proceeding on tax forms needed to do the financial aid, and any advice would be most appreciated.</p>
<p>It has been many years since I did taxes but a quick look at a 1040 shows:</p>
<p>She does not check a box on line 6 because she can be claimed on someone else's return. Her standard exemption will be figured using a special worksheet for dependents. </p>
<p>So, yes she files her own return but you still claim her. She will likely get some money back but perhaps not all depending on how much she made. But it won't affect your return.</p>
<p>We have done both things (kids filed, kids didn't file) and claimed the kids on our taxes. One year, our son didn't have to file, last year our daughter didn't have to file. This year both have to file. Last year DS had to file (you get the picture). In all cases, WE declared them as dependents...and we completed our taxes accordingly. When our kids filed, they got all the money back (neither has ever earned more than the limit to do so).</p>
<p>Agree with Thumper. Probably best to include them as dependents on your taxes, and have them file their own. And suggest you get the FAFSA/Profile in ASAP, meeting all deadlines, using estimates (estimate your income conservatively), and then correct them later. FAFSA corrections online are very easy, and it's expected by the schools.</p>