We were told by our Income tax agent that our son, whom goes to college full-time and works part-time, has made too much income for us to claim us on our taxes. He lives with us and travels 90 miles round trip five days a week for school. He never told us what the income limit is before we cannot claim him. Of course this made a huge difference on our return.
Since we filed we found out through other sources that we should have been able to claim him no matter what since he is living with us, we pay his insurance and his schooling.
So what do we do now?
My son is 20 and he made approx. , 000 last year, lives at home and we pay for gas, school and his food. He was taking about 15 credit hours both semesters in 2007.
You can AMEND your return. It is easy to do. Go to the library or on the IRS website and get a form for amended returns. It is a form that you can use for any year, and you need to put the year you are amending on the top of the form. If would be better is you wait until after this tax season is over to amend this years taxes. If you file now, it will be pushed to the bottom of the pile with new returns coming in everyday. Remember, if you claim your son as a dependent, he CANNOT claim himself as a dependent. He can still file a tax return, he just cannot claim himself as a dependent.
If your son is under the age of 24, a full time student AND you can show that you provided more than half of his total support, then you amend.
There is no hard and fast income limit. The ONLY support test for claiming your son as your Qualifying Child is that he must not provide more than half of his OWN support. There’s a worksheet in IRS Pub 501 that will help you determine if your son provided more than half of his OWN support. Here’s a link: http://www.irs.gov/pub/irs-pdf/p501.pdf
Your “income tax agent” should know this and should have used that worksheet to make the determination AND explained how he arrived at his decision. If he didn’t do this, he’s incompetent and you need to find someone who knows what they’re doing in the future.
Run the numbers using that worksheet in IRS Pub 501. If you can claim your son as your dependent, go back to the tax preparer and have him prepare an amended return on Form 1040-X to correct his error. Since he appears to be the one who screwed up he should do this for you without charge.
Assuming that you were and are able to claim your son, you can file an amended return using the form 1040x if you have already filed. If you are not sure if you are able to claim him, call the IRS at 1-800-829-1040 and ask to make sure. An amended return can take up to 12 weeks, but if you were getting extra money back, the IRS may even pay you interest. Now there is one thing you need to check on. If your son claimed himself, then he will also need to file an amended return to not claim himself and may need to send money back. If the net difference is still in favor for your family then you should amend.
See pub 501 page 10 table 5. you will probably meet all the tests for a qualifying child except maybe the support test. You state you son has a part time job, how much did he make? Did you provide more support than he did?
Make sure your other sources are correct before amending your return. You did not mention how old your son was at the end of the tax year. If he was under the age of 24 his income doesn’t matter as long as he did not provide over half of his own support.
If your son was over 24 at the end of the tax year and made over 3,400 your tax agent was correct in that you cannot claim him.
There isn’t an income limit. If he provides over half of his own support you can’t claim him. If you are sure that he does NOT provide half of his own support, then you can amend your return and claim him. Oh, and get another tax guy.
Of course, if your son makes $45K a year or something, you might have a hard time showing that he doesn’t provide over half of his own support, unless he banked most of it to save for the future.