<p>I don't even know if I qualify to file taxes separate from my parents because (a) I'm still dependent on them - I live with them and also they pay for school, and (b) I only made $7000 through my part time job in 2012.</p>
<p>Is it my only choice to combine my taxes together with my parents (them claiming me), or is it possible to file it alone? Will it impact my financial aid, and will I receive a return because I did it separately? I'm 21 years old and attended college full time, if that matters.</p>
<p>First, you never combine YOUR taxes with your parents. You need to file your own tax return. I believe a $7000 income is above the threshold where you do not have to file.</p>
<p>This will make NO difference in what you put on the financial aid application forms. You have to list your income even IF you are not required to file. Having your parents claim you as a dependent has no bearing on your financial aid application forms.</p>
<p>You cannot claim yourself on your taxes. You are what is known in IRS terms as their qualifying child. They can claim you because you are their child, you are a full time student, and you do not provide more than half of your own support.</p>
<p>Even if they chose not to claim you, you would not be legally eligible to claim yourself.</p>
<p>You do not combine your taxes with theirs - a fallacy that seems to be rampant in some circles!</p>
<p>Your parents will file their tax return, claiming you as a dependent.</p>
<p>You will file your own tax return, reporting your earnings, and will be able to use the standard deduction to reduce your taxable income, but not your personal exemption. </p>
<p>Even if you were able to file your taxes as an independent tax payer, and claim your own exemption, you would still be considered a dependent student for financial aid purposes - they are two different things.</p>
<p>Incidentally, it makes more sense for your parents to claim you for tax purposes anyway -if they are paying tuition, they are eligible to claim the American Opportunity credit based on what they (or you) paid, and are more likely to get significantly better tax benefit than you by doing so, not to mention other possible tax breaks.</p>
<p>Actually there is an option to combine the child’s income with the parents’ on the parents’ tax form, but this is for unearned income. See Form 8814, Parents’ Election to Report Child’s Interest and Dividends. This is an option if a child’s earnings are only from interest and dividends, including capital gain distributions, and are less than $9,500. </p>
<p>Since the OP has earned income, he/she needs to file his or her own taxes.</p>
<p>Yes, investment income can be included, however the OP was talking about a part-time job, so that income cannot be included. There have been a number of posts here recently where people have stated they have added their kids’ W2 income to their own income on their tax returns.</p>
<p>For those children with less than $9,500 of investment income, it does make sense to include on the parents’ return because it will be taxed at their rate anyway.</p>