Income tax

Daughter called this afternoon, preparing their income tax she was told she and her husband can not count their 17 year old daughter as a dependent, even though she is a high school junior with another year to go. How can the IRS deny counting a legitimate dependent still living at home? Anyone hear of this?

They will try anything. Find it in writing! If its not in the actual tax code; then they cant really force it. The Law says You only have to pay what You owe. If something says different?...

Get another opinion - or better yet call the IRS yourself. As I read the rules, you should be able to claim her UNLESS she has her own income, and is taking herself as a dependent.

Did you daughter file a return if she did and checked no one can claim her as a dependent, then you can't claim her. I don't know what your situation is but if you supply more than half her support you can claim her as a dependent as long as no one has claimed her including herself. I have 23 old daughter who is a college student we still claim her. She just graduated college in December.
Chuck

Her parents need to call the IRS and she needs to be nearby in case they want to talk to her. If she has no income they should be able to claim her. If she earned any money she may be due a refund. Hal

Chuck has it right- and to expand on it, you need to coordinate with her in filing- a teenager filing on their part time or summer work would have to make several thousand dollars before the exemption would be as useful to her as it would be to you, because you are undoubtedly in a higher tax bracket. "Do the math", as they say, and file accordingly.

Seventeen year old grand-daughter has a little income from starting to work at a fast food part time job. Income wouldn't be more than a few hundred dollars so far.

You said "preparing your income tax" and not "filing their income tax". Usually it is when you go to FILE the tax electronically that you get told you cannot claim your dependent and it is usually because they have jumped the gun and filed early, claiming themselves when they should not. If this is the case the child can immediately amend their tax return (has to be done by mail) and then the parents can e-file theirs late in the season and it should go thru with the dependent on it.

Now, if they are indeed being told during preparation that they cannot claim their child (either by a software program or by a tax preparer) then most likely this is bad advice. Do not call the IRS. Talk to someone locally who you trust. I answer questions for people all the time on the phone and never ask for a dime. Gets me a new client sometimes.

One more possibility is a communication problem. At 17 years of age they can no longer claim the CHILD TAX CREDIT but can still claim the child as a DEPENDENT on the front of the return. Two different things and, if I were a betting man, I would bet this last is what is going on here. Ask for clarification.

HTH

Dave H*** CPA

I just phoned our daughter (she's a paralegal). She said their 17 year old can still be counted as a dependent but not for the $1000 child tax credit. I wasn't aware of the "child tax credit".

If she only made a few hundred dollars, she'll owe no tax, and the benefit to her to take her own exemption would be exactly zero. Or in the words of the old song, "Nothin' from nothin' leaves nothin'."

But she still needs to file to get back whatever her employer withheld. Just make sure she doesn't claim her own exemption. My kids sometimes did make enough summer money to be taxable, but it all went toward college, so I just paid their taxes for them, and kept the exemption. Most of the time, the exemption was worth more to me than it cost to pay their taxes- and I wanted to encourage them to work! Nothing so discouraging for a kid than to work hard, and then have to pay Uncle Sam part of it- "What a gyp- I didn't see any guvment guys out there sweating with me- why should they get any money?"

I doubt if she's filed yet, so if her parents tax adviser said they couldn't take her as an exemption just as a general rule, and not because she checked the wrong box, time to be looking for a different tax adviser, who actually knows what he's doing.