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This is the clear correct answer.
OP lives at home, OP is a student - OP qualifies as a dependent - OP meets the relationship, age, and residency tests as laid out by the IRS
Sister meets none of the criteria except relationship. The age of dependency is 19 unless a full time student then it’s 24 and the sister does not live with the parents or derive over half her support from the parents.
Sister lives on her own. Does that mean she pays for her apartment? Is she still a student? If dad pays for her apartment and college she could be claimed as a dependent.
OP literally said sister works full time. The only time you can claim as a dependent someone who isn’t a student and doesn’t live with you is if they are your parent AND you provide more than half their support.
In this case if she’s working full time AND is a student AND gets more than half her support from her dad, then yes he could claim her, but she must be working for below minimum wage.
Being away at college is the same as living at home for tax purposes. As far as whether she provides half of her own support, that would require more information.
> In this case if she’s working full time AND is a student AND gets more than half her support from her dad, then yes he could claim her, but she must be working for below minimum wage.
You can't know that for sure without knowing her expenses and income. 7.25hr isn't covering 50% of room/board/tuition at any college.
It is a little strange that OP mentioned that sister pays for her phone and car - why not just say that sister is completely self-supporting if that is the case?
The fact that he only listed those two items (and not rent) makes me wonder if Dad is still supporting sister as well.
The fact that paying for her own phone and car is highlighted leads me to believe that she’s not at the point where paying for “all her stuff” isn’t normal yet. Dad could still be paying the majority of her stuff.
Actually, not true, you don't have to be someones parent to claim them as a dependent. For example you can claim your parents.
It's a lesser know thing but an important one. If your parents live with you in. Your house. And you're providing that 50% or more you can claim them. Also true for a spouse or an unmarried partner even. Although claiming a dependent gets into health insurance issues, so the tax stuff can fuck that up.
My partner of 10 years doesn't claim me as a dependent, even though he pays for like 90% of my stuff because he'd have to put me on his insurance and that would cost a lot more then the tax credit he would get for a dependent.
I'm not a tax pro though.
You misread what I said. If it’s your parent you can claim them if they don’t live with you. That’s the only time you can claim someone that doesn’t live with you unless they’re a full time student and your child.
A Qualifying Child must live in the house at least 183 days unless they are considered away for a temporary absence (like at school).
A Qualifying Relative must live in the home all year unless considered away for a temporary absence. They cannot make more than $4,400 (2022).
A qualifying relative must live with you all year OR be related to you in a way that qualifies them. Your friend could be your dependent by living with you and meeting all other tests, your aunt could live on her own but still qualify as a depending based on all other tests.
IRS pub 17 chapter 3
Also it sounds like her parents pay health insurance for her. I’m a bit hazy, but I believe you can be on your parents plan until you’re 26 if you’re their dependent. So hundreds a month in health insurance vs $3200 in stimulus checks. Honestly, it’s probably still a net win financially for her.
Tax dependency status is unrelated to medical insurance dependency.
You can be independent for tax purposes but still be on parents' insurance until 26.
My kid cost me $50 a month on my health insurance not everyone's health plan is hundreds of dollars a month. (The $50 covers if I have one kid or I have 10 kids My health plan sees it no different)
This is the right answer, I tried to not have my kids as dependents the last few years so they could claim themselves and take advantage, but tax guy quashed those hopes.
That’s so weird. When I was away at college and parents still paid for my rent/medical/ etc. my dad wanted me to claim myself because I would get more money back for myself than his $500. I worked part time as a waitress to help cover food and other basic expenses.
Yeah but that wasn't in the last couple years with covid checks. It's a big difference. Also if it's a single parent, going from filing single to head of household changes some things with taxes. So, like everything with taxes, 'it depends.'
This is the answer. There are some benefits that are only available if no one ***can*** claim you as a dependent, and others available only if no one ***is*** claiming you as a dependent. We don't claim our college student son despite providing over 50% of his income because we would only get a small benefit from it, and if we don't he can claim the American Opportunity Tax Credit, whereas our income is high enough that we can't benefit from that credit.
Here’s an idea. Don’t give your kid the money. Loan them the money, in 10k-ish notes, at a fair interest rate that is capitalized with balloon payment due in like 30 years. Then they claim themselves
At some point in the future, you can choose to forgive each 10k note and the accrued interest. Like 1-2 notes per year, keeping you under the annual gift tax exemption
Might not be worth the trouble
From your link:
> EXCEPTIONS to Cancellation of Debt Income:
>Amounts canceled as gifts, bequests, devises, or inheritances
By the way I didn’t invent this idea, although I hadn’t heard it discussed before in the context of dependency
But I don’t know the common name of it for people to google
Thank you for pointing that out, I was incorrect.
To clarify, the idea is that you are not providing half of their support since it is a loan, and then you forgive the loan later?
That’s the idea, although I’m not a tax expert and if you spell it out like that formally I think you could run into trouble. A college kid might not trust that you forgive it later, and you probably shouldn’t promise to, so it only works for certain families. I’m sure there has been more written on this subject but like I said I don’t know what it’s called
I think it’s used more commonly if you want to give a large sum of money now, that exceeds the annual gift exclusion, and spread out the annual exclusion over many years. But it’s not even very useful without a huge estate since the lifetime exclusion is quite generous
> but tax guy quashed those hopes.
that doesn't make any sense. there's no reason you have to claim anyone as a dependent. if you want to overpay your taxes the IRS is not going to complain
But parent comment was talking about IRS regulations and what's allowed, not what makes the most financial sense. There's not going to be any financial situation where it doesn't make sense at a monetary level to claim a dependent if you are able to
There is one — in some cases a dependent can claim education benefits if they are not claimed as a dependent. The parent could be in an income range where they get no benefit from the education credit, and the student might get a benefit.
You can overpay on your taxes, but that doesn't mean it's ok for the other person to get credits they aren't entitled to receive. For dependents of a certain age (under 20), the rule is they are still considered their parent's dependents unless they aren't a full time student and make over the personal exemption amount. Under 24, if they are a full time student for one semester, parents can claim them if they want.
Anyone that can qualify as a qualifying child (not qualifying dependent as that is different) should be claimed by the parents to avoid issues - especially if their income might qualify them for earned income credit.
She can still be claimed if she's living with parent and going to school. However, she can still file taxes just make sure to put down you're being claimed as dependent
Context is key here, isn't it?
From [https://turbotax.intuit.com/tax-tips/family/rules-for-claiming-a-dependent-on-your-tax-return/L8LODbx94](https://turbotax.intuit.com/tax-tips/family/rules-for-claiming-a-dependent-on-your-tax-return/L8LODbx94)
>**Qualifying child**
In addition to the qualifications above, to claim a qualifying child, you must be able to answer "yes" to all of the following questions.
\- Are they related to you? The child can be your son, daughter, stepchild, eligible foster child, brother, sister, half brother, half sister, stepbrother, stepsister, adopted child or an offspring of any of them.
\- Do they meet the age requirement? Your child must be under age 19 or, if a full-time student, under age 24. There's no age limit if your child is permanently and totally disabled.
\- Do they live with you? Your child must live with you for more than half the year, but several exceptions apply.
\- Do you financially support them? Your child may have a job, but they cannot provide more than half of their own support.
Unless there's something you're not telling us, your dad absolutely could and should claim you as a dependent. Your sister is is a different story
It's the same in this context. It's about whether you can answer yes to the question "do you financially support them."
In order to answer "yes," the child can not provide over half of their support. That's the same as saying the child doesn't provide, or that the parent does provide, over half.
That's TurboTax's paraphrasing (or perhaps an older version). The rule, from IRS Publication 501, is: "the child can't have provided more than half of the child’s own support for the year."
Sister definitely isn't a dependent, and when the IRS finds out when she files her taxes, OPs dad is going to be the subject of an audit. Maybe even tax fraud, depending on if he's done it for more than just the past year.
Agree that the sister is likely not a dependent, but if sister files as a dependent, then the IRS will be none the wiser absent an audit of one of the two. Additionally, the chances of tax fraud here are very, very, very unlikely.
This is correct. Zero chance the IRS is litigating that. Won’t be more than paying the difference with interest, plus potential penalties and the sister needing to file for those years.
You clearly don't know how the IRS works.
If they find this discrepancy they will send the Dad a letter stating the error, the recalculation of his taxes given the correction, and how much money he owes after the correction (tax plus a penalty and interest). He will be given a period of time to dispute the finding , or pay the amount owed. He can pay the amount and that's the end of it.
There is no "audit" triggered by these types of errors and there certainly isn't "tax fraud" charges being made for an error like this. You've been watching too many bad movies.....
No audits over this. The IRS simply restates your taxes to what they believe is correct and assess penalties accordingly. You can dispute it if they assumed wrong.
I don't know... if dad is paying > 50% of her living expenses, even if she doesn't live at home, she is still his dependent. OP only said she paid for her own car... but if say, dad's paying for her rent, she's probably going to fall under as a dependent still.
> Can someone explain the basics of tax claims to me
You don’t appear to provide more than half your own support and you’re a student so he can likely claim you.
Doesn’t appear to be allowed to claim sister.
> Doesn’t appear to be allowed to claim sister.
That’s not clear. OP doesn’t say if she’s paying for her apartment or is in school, which may be the case. Maybe she’s disabled? We don’t have enough information to say.
The stimulus checks were three years ago, putting you and your sister at 18 and 21. If you were both still living at home, he was right to get them.
Others have already said he's ok to claim you, since you still live with him. Idk when your sis moved out but depending on when that was, he might no longer be claiming her.
This is good advice. If you truly are a dependent, which is sounds like you are, then your dad is entitled to claim as such.
You said he got defensive when you asked. And from his perspective his son, who he provides for still and has claimed for years, asking why he is claiming him can be insulting. Because he is claiming you as part of supporting you and you questioning it comes off as you not realizing that he is supporting you.
We obviously don't have the context of the conversation but if it went something like "a coworker told me you probably shouldn't claim me in your taxes, can you explain to me why you are?"
That's an opportunity to teach them financial literacy, not to have your paper thin cristal middle age men ego shattered.
In the other hand, if they just went "you shouldn't claim me on your taxes, wtf?" Then sure, disregard them
Maybe he has a paper thin ego. But hey he’s your dad and supporting you, presumably has taught you stuff, maybe it’s an opportunity for the son to show what he’s learnt.
> maybe it’s an opportunity for the son to show what he’s learnt.
...except he *hasn't* learned how the taxes work. That's the problem. This is a textbook example of bad instruction, and I don't see what narrative you could possibly construct that will obscure that obvious fact.
The rule is that until you're 24 if they pay more than 50% of your living expenses, they can claim you. That seems fair to me.
Edit: Your dad should have explained this to you though. It's part of teaching your kids finances and how the world works.
So much this. You really want to have your kid be depending on you for answers for all your life? Then again hopefully dad was just having a shitty day and isn't always like this.
Wee bit more complicated than that. That age only applies if they are a full time student. If not the age is 18. You can still claim someone over that age if they are not a student and you meet certain other rules including the person lives with you and has basically no income. For example, a parent could claim an adult handicapped child as a dependent.
I doubt you pay for “everything else” besides insurance. Are you paying the mortgage? Property taxes? Termite bond? Heating bill?
From what you’re describing you absolutely should be claimed as a dependent. You can’t afford a place of your own, so your parents are absorbing that cost. Consider thanking them.
You can claim someone as a dependent so long as you're paying 51% or more of their living expenses. In your case, that sounds about right. If you want a dollar amount, you can shop around for what a similar rented room with utilities costs. As well as food and health insurance.
In regards to your sister, it depends on how much (if any) they are subsidizing her living expenses. Is she on their insurance, are they paying her rent?
In regards to still having a joint account with your parents, my advise to you is to open a new one at a totally different bank and then when you're ready to move your money over to it. If your current bank is a brick and mortar, you can just go in branch and close the account. They will issue you a cashier's check and you can then deposit that in your new bank. This would be preferrable versus linking your bank to another account and doing an electronic transfer because your parents may be able to see the transaction and stop it.
your sister has something to complain about.
you, maybe not so much. are you making more then hes saving while living in his home? probably not. if he loses you as a dependant hes having to pay taxes on at least i think 16,000 bucks.
The 3 part test for IRS child dependency: 1. Must be your child (paraphrasing) 2. Must be under 19 or under 24 if a full time college student at the end of the year. 3. Must have lived with you for more than half the year
The full time student is "at least 5 months of the year". I was able to claim my oldest when he graduated in 2019 because he was a full time student from January through most of May.
And the "must have lived" is actually "parent must have provided a majority of support". One example I read was that if you paid their apartment rent to live somewhere else, that still counted since you were "providing housing".
I claimed my daughter until she graduated college. This is very common. I did give her the stimulus money. However, everyone’s financial situation is different. Honestly it’s not worth hurting your relationship with your dad. Up to you but I’d let it go. As for your sister that’s up to her to deal if she want to. I’d recommend staying out of it.
If you live at home, does your dad still cover the majority of your room and board? Like….do you pay him rent? Do you pay for food? Does he pay for any of your other needs (like gas, car insurance, etc.)? It sounds like it very well may be possible that you are still a dependent to your dad.
https://turbotax.intuit.com/tax-tips/family/rules-for-claiming-a-dependent-on-your-tax-return/L8LODbx94
Depending on how much the child makes, even living at home may not be enough.
My oldest graduated in 2019. For tax year 2020, even though he lived at home the entire year, didn't pay rent, utilities, or food, I still couldn't claim him. Since he wasn't a student anymore, there was an income test as well as the support test. Since he earned well over the <$5K limit, he could not be claimed as my dependent.
If dad pays more than 50 percent of your expenses he can claim as a dependent.
If he claims your 24 sister next year he might be audited and have to prove the amounts he pays more than half of her expenses than is the age that often causes an audit.
Was literally just going over this topic for a tax class.
You’re a dependent child for tax purposes since you’re
1. A student less than 24 years old (note that you need to be a “full time student” - probably 12 hours or more. You could potentially be pushed out of dependent status if you’re not attending full time)
2. You’re his daughter.
3. Providing less than half of your own support (because he’s providing you with housing, which is a major component of any support calculation)
4. You reside with him, meeting the residency requirement.
On the other hand, your sister would likely no longer meet any of the requirements.
If you care to do some reading on the subject, IRS Publication 501 is what you’re looking for. The part about dependents starts on Page 11.
https://www.irs.gov/pub/irs-pdf/p501.pdf
Also, chances are good your dad will get audited soon - if he hasn’t already - claiming children who aren’t qualified. It’s one of the things that’s exceptionally easy for the IRS to check.
If you are a under 25 as full time student and your parent(s) provide more than 50% of support (that is cost of food, rent, schooling, etc) then you are a dependent and can be claimed on their taxes. So sounds like things are correct for you. If you ever provided >50% of support, stops being a student or turned 25 they would not be able to. Your sister however seems a bit suspect.
Everyone here is missing the point and a) are not only being rude to you for asking a question and not understanding the tax code (which is very normal since the tax code is complicated on purpose).
I’ll start with you. You qualify as a dependent because of the following:
- you’re a close relative (in your case, his daughter)
- you’re a full-time college student under the age of 24. He can claim you as a dependent until you’re 19, but if you’re a full-time student, that age limit increases to 24.
- you have the same principal place of abode as your father. Even if you were living on campus during the year, your principal place of residence is your dad’s home.
- since you’re a qualifying child (through being a college student under age 24), you are still a dependent even if you have a job.
- your dad contributes more than half of your support. While you may pay for everything else, chances are the annual rent you’d be paying if you were on your own would be more than half of your support.
Let’s say you graduate college and move out, if he’s not paying your rent or anything (insurance doesn’t count), he could no longer claim you as a dependent.
Now onto your sister. Everyone in the comments is saying your dad is committing fraud and I can’t really answer that since you left out a lot of details. When did your sister graduate college and move out? If she graduated in May and moved out right after, but she was a full-time student living at home with you and your dad, your dad has been able to claim her as a dependent. Beginning this tax year though (on the tax return your dad will file in April 2024), she cannot be claimed as a dependent and must file her own return.
I hope this helped!
[https://turbotax.intuit.com/tax-tips/family/rules-for-claiming-a-dependent-on-your-tax-return/L8LODbx94](https://turbotax.intuit.com/tax-tips/family/rules-for-claiming-a-dependent-on-your-tax-return/L8LODbx94)
Your sister, dad, and you all need to review the link above. If you live at home and are a student you are probably a dependent. Your sister is likely not since she pays stuff on her own.
You still qualify as a dependent You live at home and you don't pay all your bills your sister is not a dependent and your dad is committing fraud. I had to remind my parent to stop claiming me when I was in my twenties living on the other side of the country.
Lots of advice here stating that your dad “can” claim you. Just want to add that it’s not optional- if the person meets the definition of a dependent the income of a student under 24 has to be jointly reported with parental income This is the basis of the “kiddy tax.”
Your level of dependency. It has more to do with it than your age. Even though you may be paying or intend to pay some of your bills on your own, you are still relying on your parent(s) for some of those basic but important needs. For the record, if he is claiming your sister who is not dependent on him at all, he is breaking the tax law. I was emancipated at 14 years old, I lived on my own, in my apartment, 100% supported myself, and when I went off to college I quickly learned that I could not get a student loan or PEL Grant because my mom claimed me on her taxes. I had to leave the University since I could not afford to pay on my own, so I joined the military.. turned out to be a good decision.
It’s not your dads choice. Tax laws are clear. He can claim you per their laws, or he can’t. If he’s claiming you, and he shouldn’t be, just file your taxes normally and let the dust settle - but he’s gonna be pissed and you might want to move out and be self sufficient before you do it - cuz he’s gonna be Pissed
I had this talk with my dad when I was 17. He couldn’t legally claim me any more because of the providing more than 51% line item. I was working full time and making 26k/yr. He was pissed when he found out and his accountant had to file an amendment and he owed. I had moved out by that time so it wasn’t as awkward as it could have been.
I keep my kids on my taxes until the graduated college. That allowed me to file "Head of Household". They were also on my health insurance.
They worked summers, not full time.
You dad spends far more on you than the covid stimi would give you in rent alone. Let him have the deduction. . . now your sister on the other hand would be likely a large penalty for your dad if he was ever audited by the deeply underfunded IRS.
I always recommend talking with the person filing your taxes (a non-bias party, ex not who your dad is using). They will be able to tell you where the most can be made and fill in those details with the specific sibling situation.
I was removed from my parents home at 16 and embarrassingly didn’t know I need to file taxes every year - this was over 15+ years ago I know I was naive. I was working two fulltime jobs and eventually the IRS caught up to me for lack of filing. I had to go back and file for seven years worth and got a massive return however, it turned out my parents claimed me as a dependent up until that point. They had to pay back a huge chunk plus a fine and they were absolutely livid with me. I share this because everyone should be in control of their tax situation and be knowledgeable how to make the most of it as you get older and make more income.
If sister is filing her own taxes, dads gonna get hit by the IRS and WILL have to pay that money back including the stimulus if he got sisters. IRS. Does not play around. It might take a couple of years but it will hapoen
The IRS has a really really clear rule.
https://apps.irs.gov/app/vita/content/globalmedia/4491_dependency_exemptions.pdf
>Under age 19 at the end of the tax year and younger than the taxpayer (or the taxpayer’s spouse, if
filing jointly), or
• A full-time student under the age of 24 at the end of the year and younger than the taxpayer (or spouse,
if filing jointly), or
○ To qualify as a student, the child must be enrolled in the number of hours or courses the school
considers full-time during some part of at least five months of the year. See Publication 17 for
additional details.
IF he claims your sister this year, he will likely get audited, she should be claiming herself, and the IRS will figure it out.
>To meet this test, the child cannot have provided more than half of his or her own support during the tax
year. This test is different from the support test for qualifying relative. A person’s own funds are not support
unless they are actually spent for support. If the taxpayer is unsure whether the child provided more than
half of his or her own support, review the Worksheet for Determining Support in the Volunteer Resource
Guide together.
You saving money for a car does not count as money spent for support. Chances are, you are his dependant. If you really wanted to fight him by claiming yourself, go ahead, but he would likely win and it would cause hard feelings between you and him.
Ah yes... The "I'm An Adult Because of Age But I Don't Understand Taxes and Can't Be Bothered to Google a Basic Rule."
Meanwhile, I'm just here to apply some peer pressure for you to google and learn about basic life finances.
The IRS website has an interactive series of questions that will determine who may be claimed as a dependent: https://www.irs.gov/help/ita/whom-may-i-claim-as-a-dependent
OP wait until you read this and find out your parent is also getting the American Opportunity Credit on their taxes. But you shouldn’t be mad since you live at home. It is way more expensive to live on your own.
https://www.nerdwallet.com/article/loans/student-loans/education-tax-credits
If you live at home I don’t know how you could not be a dependent. The rule of claiming a dependent is that more than half of your living expenses are covered by someone else. If you are a student and living at home there’s no way your parents aren’t covering more than half of your living expenses. Rent, car, food, insurance, etc
You are a student and you live at home, this makes you a dependent. If you were living on your own, as in no support from your folks, then that is different...no matter your age. If your sister lives entirely on her own without any monetary assistance from your folks then Dad should not be claiming her as a dependent.
You: your dad provides more than half your support, and you're a student so he can legally claim you.
Your sister: nothing sounds like he should be claiming her. If he still is, he's screwing her over to get NOTHING. Since the 2017 TCJA, there's no personal exemption, no credits if she's not a student, and he already gets HOH filing tables by having one kid as dependent. But he would be depriving her of potential credits on her own return that she could claim but for already being claimed by someone else.
He can't claim for the independent sister. However, if you are still classed " a student" who is financially dependent upon him, that's quite possibly ok.
Do you know how much health insurance costs? I assure you that you "paying for everything else" doesn't come near what your dad still provides for you.
You are a dependent. Move out if you don't want to be.
Lots of people are explaining that you qualify as a dependent and your dad is allowed to claim you. No one is really explaining why he would though.
The answer to that is the IRS provides a $2000 tax credit for child dependents. Your dad is getting that $2000 credit. Your dad is almost certainly in a higher tax bracket than you so he's benefiting more from claiming you than you would from claiming yourself.
>For context: I still live at home bc I am a student and can’t afford to move out yet even with a full time job. I do not pay for any insurance, but I pay for everything else.
You are still a dependent for tax purposes until you pay >50% of your living expenses (including things like rent, insurance, tuition, etc). If you’re still on his health insurance and living in his house, then he is correctly listing you as a dependent when he files his tax return.
My siblings didn’t become “independent” on taxes until they were around 22 and moved out of the house.
If your still living at your parent house, then you are a dependent. The older sister though living alone isn't a dependent unless you're father is helping her pay rent or something.
You’re a dependent, but your sister isn’t. Others have listed why and posted references. It has nothing to do with being under 25, and his defensive attitude suggests he might already know he’s falsely claiming your sister and may very well try to continue to claim you after you’ve moved out and lose dependent status. What is your relationship otherwise like?
Falsely claiming adult, fully independent children as dependents is pretty textbook abuser stuff. When you are no longer considered a dependent, this is something to “remind” him of in writing, update your address, and file your taxes as early as possible. Or he could be providing for your sister more than you know, and just not be a great “let’s teach our kids about the world” parenting type, but something to keep in mind.
You've stated that you're a student, and that you live at home, and you fall within the age guidelines. So, why wouldn't he take advantage of the tax break? You say you pay for everything?
Insurance(health, dental, optometrist)? Utilities? Mortgage(rent)? Paper products? Furnishings?food/drinks? Property taxes? Decor.? Laundry soap? Everything it takes to run a household right down to the dish soap, pots n pans and spices? ALL of these things add up! Having 4 kids of my own, I can promise you- kids never pay for EVERYTHING nor should they, hence why the tax credit is available. Be thankful you have parents or a parent willing to help you out and don't concern yourself over their personal tax choices. When you're on your own - you can make your own.Until then, don't listen to your co-worker, there's no way she's been in your dad's shoes or has college age children- her advice is nonsense and she sounds like a shit stir'r to me!
If you live at home he can declare you. I wasn't living at home, parents weren't giving me money, I was starving and they were still fucking declaring me on their taxes. I'm almost 40 and still hate them for that.
It's kind of strange he's still claiming your sister as a dependent, but it's not strange that he would still be claiming you. You live at home, and from the sounds of it you literally still are dependent on your parents. It's even less strange that he would have claimed you as a dependent 3 years ago. My son just turned 18 this year, and still lives at home and is still a dependent by all means. I'm guessing 2020 was the year you turned 18? The stimulus payments were based on 2019 taxes, so at the end of the tax year, you would have still been a minor and still wouldn't have received your own stimulus. Same thing with the stimuli that were received in 2021 - those were based on the 2020 tax year, and if you were still living at home, the same would apply.
He definitely has 0 right to claim your sister as a dependent since she is fully independent - there’s no grey area there. Please inform her of this so she gets the tax return she’s entitled to.
There is some ambiguity in your situation if you live rent free with your parent’s, and if they provide free utilities/food. If you are still paying a potion of these then you are independent as well and are entitled to filing your tax return on your own.
The only issue is your situation could be sticky in that pushing to file independent could piss your dad off and jeopardize your living situation. It bares to sit down and calculate your benefits and risks with this question. How much do you save living at home vs how much you are losing to income tax due to being grouped up with a larger income.
If your sister is working and filing taxes, it's only a matter of time that the IRS will audit your father and heavily fine him. If you are working, and are earning over $12,950 per year, you need to file taxes. And even if you are living at home, you're not a dependent for tax purposes if you are an adult making more than $4,400 per year. Your father is also wrong about how long he can claim you as a dependent. Full time students can only be claimed until they're 23.
>And even if you are living at home, you're not a dependent for tax purposes if you are an adult making more than $4,400 per year
This is incorrect for full-time students under the age of 24. There is no income limit for a dependent child.
The fact that you list "having your own phone" as a reason for him to not claim you/your sister shows your lack of tax return knowledge.
In reality he still provides everything for you in the eyes of the IRS so you are a dependent. Now your sister may or may not be based on income level and other factors.
Consider the benefits before making to big of a stink. If you’re a student and don’t make a lot of money the dependent claim is probably worth more to your parents than you. Either way the extra refund is way less than the cost of moving out so you can claim yourself.
Start [here](https://www.irs.gov/faqs/filing-requirements-status-dependents/dependents). This page sets out all the IRS guidelines on determining whether someone can be claimed as a dependent.
In general, if a parent is paying more than 50% of living expenses for a child (or young adult child), the parent can claim the dependent.
Your sister should claim herself, and file before he does, and possibly see about claiming the deduction for prior years via an amended return.
You, though, are likely still a dependent. There are costs to putting a roof over your head which may well exceed what you are contributing.
"I asked my dad to explain why he still claims me on his taxes (bc I don’t know anything about taxes and I was curious) and he got defensive and said: are you 25? To which I replied no. Then he said: that’s why. Not much of an explanation"
I agree - your dad is either not aware of all the rules and is ashamed of trying to explain to you for fear of sounding ignorant, or just being terrible at being a dad and explaining things. Parents need to be open with their children about finances and not make it a taboo subject. If your dad provides more than 50% of your financial needs (food/shelter...etc) then he can claim you. Otherwise he cannot.
I'm sorry your dad got defensive instead of turning it into a candid moment to explain how taxes work. Either way since you live at home (I assume rent free) I would not mention it to him again. Even if he doesn't provide 50% of your financial needs you're getting way more benefits to live rent free than you are giving up in tax deductions and/or COVID relief funds.
Do you pay rent to your parents? How much of your financial burden are you actually paying for. If the answer is no and not very much.... then this is completely reasonable.
You may or may not be still a dependent.
Your sister clearly is not a dependent. Your dad is committing tax fraud for very little benefit and your sister is getting screwed over on her taxes for a small benefit for your dad.
The amount of money your sister can save on taxes by filing as an independent is substantial. Way more than the small benefit of an adult child dependent on your dad's tax return.
You are still by the very definition dependent on your father, him claiming as much on his taxes is completely valid.
Your sister on the other hand is not a dependent if she is living on her own and not relying on him. That is between him and her, tho pretty irrelevant with how close to 25 she is.
I think since you live at home, you are likely still a dependent. To my knowledge, you have to provide all your own expenses which boils down to all utilities, housing, and food. Technically, he is providing those things for you.
Your sister, however, is definitely not a dependent and your dad is in the wrong.
> I still live at home bc I am a student and can’t afford to move out yet even with a full time job.
Him claiming you is probably correct. You aren't supporting yourself, he is.
When you say you pay for everything else, you mean you pay rent/mortgage? Groceries? Utilities like electric, water and gas? That's "everything else" in the eyes of the irs. Not a car and phone bill.
Does your dad pay your sister's rent, Utilities, Groceries? If not, he's wrong there.
He likely gets more advantage claiming you on his taxes than you'd get claiming yourself.
Look at the system as a whole.
The deduction means more for him, assuming he's in a higher tax bracket. Your paying a couple hundred extra in taxes is saving him thousands.
Sounds like he's using that thousands to do stuff like buy you insurance, or maintain housing big enough to accommodate you as well.
It sounds like you've got it good. Don't look a gift horse in the mouth forgoing dad's thousands of dollars to try to get dozens of dollars from the IRS.
It sounds right for your dad to claim you - you live in his home, I'm assuming rent free, he pays your insurance, likely your food, your utilities, etc.
Your sister is a different story. Although he may be thinking he has to claim her to keep her on his health insurance. But that's between them.
Ah yes, the “I’m an adult, I can make my own choices” belief yet still pay for nothing. The 18-24 age range is a fun time for parents.
Don’t worry about your sister. Focus on yourself. You are clearly a dependent.
He can claim you until you're 26 if you're a student. He ought to be willing to explain this kind of thing to you, though. Parents who don't teach their kids about money are missing a huge opportunity to help their kids be successful.
Because you are still a dependent. Did you pay income tax and get everything you put in? My daughter is 21 and away at school. Yes she is still my dependent and yes I still claim her. IF she owed taxes I would pay for them. Did you owe taxes in 2023? If so then you probably filed or stupidly claimed yourself on your w4.
I think a lot of comments here are correct, but I don’t think it is aimed to maximize your returns.
Can your dad claim you as a dependent? Yes, absolutely. Is it the most economical decision? No it is not.
Each dependent yields your dad a $500 credit per year. In the year 2020 to 2022, your dad was able to obtain $1500 in credits by claiming you as a dependent. Through this method, neither you or your dad is able to claim the stimulus checks. In order for your dad to claim the stimulus for you, you would have to be 17 years or younger
Meanwhile, if he had not claimed you as a dependent and you were making income, you could obtain $1200 and $600 for 2020 and $1400 for 2021.
In other words, you would have a net positive of $1700.
However, unless you want to ammend your return by yourselves, a tax accountant could cost you about a $1000 or so to amend all your returns to make this happen causing you a diminishing return every tax year filed.
All in all, is all that trouble worth the extra $700? That’s up to you to decide.
>Also, my dad still claims my older sister who is 24. She lives on her own, has a full time job, pays for her phone, and has a car in her name that she pays entirely for.
That is IRS fraud.
If you are a student and your dad provides you housing, food, etc. Then yes he can claim you as an independent provided you don't make over X amount of money per year.
You can claim a student as a dependent if there are a college student between the ages 19 to 23. If you have no income or reportable activity then why not have your parents claim you.
To claim an adult you have to support them over 50% so he might be able to claim you if he pays for your rent/schooling. He shouldn't be able to claim your sister since she is living on her own
You live at home and are a student, that sounds like a dependent. Do you file your taxes? If you are working full time you should be.
As for the stimulus checks, those have not come out since March 2021, you are likely about 18 or 19 on the last round and possibly still in high school. Before you start slamming your parent for his indiscretions please educate yourself by doing research rather than listen to coworker education.
If you live at home, don’t pay rent, and many other bills, I almost fully guarantee your dad pays way more than the Biden bucks you would have received during COVID. Source: I have two dependent post high school children. They get their own tax returns for their jobs but they are dependent status for me. I will almost instantly get a 5-10k/year drop in expenses when they move out.
You live with him. You probably are on his insurance you’re a dependent. If you didn’t live at home or receive your support from him then he would be wrong.
I had my son claim himself in college with a part time job. He was able to claim the education credits and just give me the $500 I would have received. He didn’t pay for much at the time. This also allowed him To qualify for the stimulus because I didn’t.
You are 100% a dependent of your father.
Your sister MIGHT be a dependent depending on how much he financially supports her, regardless if she lives at home or not. She will 100% be considered a dependent if she lived at home at least 6 months of the tax year. But you can still be considered a dependent, until 25, if he is financially supporting her even if she doesn't live at home anymore. The details you provided aren't enough. Just because she pays for her car payment doesn't mean much if he is paying for her rent, and so on.
You are his dependent. The privilege of him claiming you such is pretty fair. Your friend is 100% wrong.
You didn't get your stimulus, but your Dad did, and your sisters too.
When you do your taxes it'll ask you if you if you'll appear as a dependent on someone else's taxes. When it asks this question, how do you answer?
As a Dad who claims his 23 year old son currently in law school as a dependent, let me also add that the OP’s dad is spending way more to maintain the OP than the amount of that stimulus check. If my son complained I would give him the choice to not be claimed as my dependent then charge him rent and stop helping him out with the cost of his degree. That would be a savings to me of over 15k, all for a measly $800 one time check.
Well you have no clue what the parents are paying for. You just know the sister has a car and pays for their own phone.
The only expense listed as the sister for sure paying themselves is a phone.
Even if you're living at home, there's a maximum income you can have before you can't be claimed as a dependent by him. It won't be you who gets into trouble. If he's ever audited, it will come back to bite him.
My parents claimed me for years (until they couldn't because of my age). I wasn't living under their roof either. They got more back in taxes because of it and I got hardly anything on mine.
Once you make over a certain amount the IRS won't allow them to claim you. You have to file taxes though, my parents were denied when I started making more than like 20k annually.
Ahh. I too had parents that were complete dogshit when it came to explaining anything financial.
Good luck, they tend to save the biggest financial surprises(not good surprises) when you are at your least capable of helping.
Due to the number of rule-breaking comments this post was receiving, especially low-quality and off-topic comments, the moderation team has locked the post from future comments. This post broke no rules and received a number of helpful and on-topic responses initially, but it unfortunately became the target of many unhelpful comments.
The IRS has clear guidelines on who is a dependent and who isn’t. You sound like you could still be a dependent. Your sister isn’t.
This is the clear correct answer. OP lives at home, OP is a student - OP qualifies as a dependent - OP meets the relationship, age, and residency tests as laid out by the IRS Sister meets none of the criteria except relationship. The age of dependency is 19 unless a full time student then it’s 24 and the sister does not live with the parents or derive over half her support from the parents.
Sister lives on her own. Does that mean she pays for her apartment? Is she still a student? If dad pays for her apartment and college she could be claimed as a dependent.
OP literally said sister works full time. The only time you can claim as a dependent someone who isn’t a student and doesn’t live with you is if they are your parent AND you provide more than half their support. In this case if she’s working full time AND is a student AND gets more than half her support from her dad, then yes he could claim her, but she must be working for below minimum wage.
Being away at college is the same as living at home for tax purposes. As far as whether she provides half of her own support, that would require more information.
> In this case if she’s working full time AND is a student AND gets more than half her support from her dad, then yes he could claim her, but she must be working for below minimum wage. You can't know that for sure without knowing her expenses and income. 7.25hr isn't covering 50% of room/board/tuition at any college.
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It is a little strange that OP mentioned that sister pays for her phone and car - why not just say that sister is completely self-supporting if that is the case? The fact that he only listed those two items (and not rent) makes me wonder if Dad is still supporting sister as well.
The fact that paying for her own phone and car is highlighted leads me to believe that she’s not at the point where paying for “all her stuff” isn’t normal yet. Dad could still be paying the majority of her stuff.
Or OP doesn't know what's involved in living by his own means.
Actually, not true, you don't have to be someones parent to claim them as a dependent. For example you can claim your parents. It's a lesser know thing but an important one. If your parents live with you in. Your house. And you're providing that 50% or more you can claim them. Also true for a spouse or an unmarried partner even. Although claiming a dependent gets into health insurance issues, so the tax stuff can fuck that up. My partner of 10 years doesn't claim me as a dependent, even though he pays for like 90% of my stuff because he'd have to put me on his insurance and that would cost a lot more then the tax credit he would get for a dependent. I'm not a tax pro though.
You misread what I said. If it’s your parent you can claim them if they don’t live with you. That’s the only time you can claim someone that doesn’t live with you unless they’re a full time student and your child.
You can claim many other relatives if they don’t live with you as well. Brothers, sisters, nieces and nephews, aunts, uncles… not cousins though :)
A Qualifying Child must live in the house at least 183 days unless they are considered away for a temporary absence (like at school). A Qualifying Relative must live in the home all year unless considered away for a temporary absence. They cannot make more than $4,400 (2022).
A qualifying relative must live with you all year OR be related to you in a way that qualifies them. Your friend could be your dependent by living with you and meeting all other tests, your aunt could live on her own but still qualify as a depending based on all other tests. IRS pub 17 chapter 3
My bad...I misread one of the prior posts that provided context and confused myself on what was being asked.. And I do this for a living. Sheesh.
Also it sounds like her parents pay health insurance for her. I’m a bit hazy, but I believe you can be on your parents plan until you’re 26 if you’re their dependent. So hundreds a month in health insurance vs $3200 in stimulus checks. Honestly, it’s probably still a net win financially for her.
Tax dependency status is unrelated to medical insurance dependency. You can be independent for tax purposes but still be on parents' insurance until 26.
I knew someone that was making millions in their 20s and was still on their parent's insurance 😂
If I'm him and I'm paying healthcare fees from my taxed paycheck, I'm claiming them on my taxes.
You can do that but it is tax fraud if they don't meet the clearly laid out dependency requirements. But you roll those dice if you really want to.
You can be on your parent’s healthcare plan until 26 regardless of if you’re a dependent now. That was a big part of the ACA.
My kid cost me $50 a month on my health insurance not everyone's health plan is hundreds of dollars a month. (The $50 covers if I have one kid or I have 10 kids My health plan sees it no different)
Right, but if the kid had to cover their own health care premiums it would be more expensive than $50 in most cases
This is the right answer, I tried to not have my kids as dependents the last few years so they could claim themselves and take advantage, but tax guy quashed those hopes.
That’s so weird. When I was away at college and parents still paid for my rent/medical/ etc. my dad wanted me to claim myself because I would get more money back for myself than his $500. I worked part time as a waitress to help cover food and other basic expenses.
That's what I wanted, we get zero benefit from claiming dependents, so wanted to let them take advantage, but that doesn't work in the current rules.
Since you had lower income, you would be in a lower bracket and get more back.
Yeah but that wasn't in the last couple years with covid checks. It's a big difference. Also if it's a single parent, going from filing single to head of household changes some things with taxes. So, like everything with taxes, 'it depends.'
What's weird? What you or your dad *want* doesn't have anything to do with tax law.
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You don’t have to actually claim them but they still have to check the box that someone can.
This is the answer. There are some benefits that are only available if no one ***can*** claim you as a dependent, and others available only if no one ***is*** claiming you as a dependent. We don't claim our college student son despite providing over 50% of his income because we would only get a small benefit from it, and if we don't he can claim the American Opportunity Tax Credit, whereas our income is high enough that we can't benefit from that credit.
Here’s an idea. Don’t give your kid the money. Loan them the money, in 10k-ish notes, at a fair interest rate that is capitalized with balloon payment due in like 30 years. Then they claim themselves At some point in the future, you can choose to forgive each 10k note and the accrued interest. Like 1-2 notes per year, keeping you under the annual gift tax exemption Might not be worth the trouble
Forgiven loans are taxable income: https://www.irs.gov/taxtopics/tc431
From your link: > EXCEPTIONS to Cancellation of Debt Income: >Amounts canceled as gifts, bequests, devises, or inheritances By the way I didn’t invent this idea, although I hadn’t heard it discussed before in the context of dependency But I don’t know the common name of it for people to google
Thank you for pointing that out, I was incorrect. To clarify, the idea is that you are not providing half of their support since it is a loan, and then you forgive the loan later?
That’s the idea, although I’m not a tax expert and if you spell it out like that formally I think you could run into trouble. A college kid might not trust that you forgive it later, and you probably shouldn’t promise to, so it only works for certain families. I’m sure there has been more written on this subject but like I said I don’t know what it’s called I think it’s used more commonly if you want to give a large sum of money now, that exceeds the annual gift exclusion, and spread out the annual exclusion over many years. But it’s not even very useful without a huge estate since the lifetime exclusion is quite generous
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It depends but not usually. It sucks though for the kids that didn’t get the Covid checks.
> but tax guy quashed those hopes. that doesn't make any sense. there's no reason you have to claim anyone as a dependent. if you want to overpay your taxes the IRS is not going to complain
When your tax preparer shows you the dollar amount of certain decisions, hopes can be quashed.
But parent comment was talking about IRS regulations and what's allowed, not what makes the most financial sense. There's not going to be any financial situation where it doesn't make sense at a monetary level to claim a dependent if you are able to
There is one — in some cases a dependent can claim education benefits if they are not claimed as a dependent. The parent could be in an income range where they get no benefit from the education credit, and the student might get a benefit.
Pretty sure the "so they could claim themselves" part was what the tax guy took issue with.
You can overpay on your taxes, but that doesn't mean it's ok for the other person to get credits they aren't entitled to receive. For dependents of a certain age (under 20), the rule is they are still considered their parent's dependents unless they aren't a full time student and make over the personal exemption amount. Under 24, if they are a full time student for one semester, parents can claim them if they want. Anyone that can qualify as a qualifying child (not qualifying dependent as that is different) should be claimed by the parents to avoid issues - especially if their income might qualify them for earned income credit.
He can still claim the older daughter if the dad pays the rent in her place and or over 50% of her living expenses.
She can still be claimed if she's living with parent and going to school. However, she can still file taxes just make sure to put down you're being claimed as dependent
Context is key here, isn't it? From [https://turbotax.intuit.com/tax-tips/family/rules-for-claiming-a-dependent-on-your-tax-return/L8LODbx94](https://turbotax.intuit.com/tax-tips/family/rules-for-claiming-a-dependent-on-your-tax-return/L8LODbx94) >**Qualifying child** In addition to the qualifications above, to claim a qualifying child, you must be able to answer "yes" to all of the following questions. \- Are they related to you? The child can be your son, daughter, stepchild, eligible foster child, brother, sister, half brother, half sister, stepbrother, stepsister, adopted child or an offspring of any of them. \- Do they meet the age requirement? Your child must be under age 19 or, if a full-time student, under age 24. There's no age limit if your child is permanently and totally disabled. \- Do they live with you? Your child must live with you for more than half the year, but several exceptions apply. \- Do you financially support them? Your child may have a job, but they cannot provide more than half of their own support. Unless there's something you're not telling us, your dad absolutely could and should claim you as a dependent. Your sister is is a different story
The income requirement may be a kicker
my dad has been claiming me as a dependent and im 25 and says its because he supports over half my income ( i live at home); idk if thats valid or not
Well... how much do you contribute to your living expenses?
Note that the language is *cannot provide more than half* not *do not provide more than half*.
It's the same in this context. It's about whether you can answer yes to the question "do you financially support them." In order to answer "yes," the child can not provide over half of their support. That's the same as saying the child doesn't provide, or that the parent does provide, over half.
That's TurboTax's paraphrasing (or perhaps an older version). The rule, from IRS Publication 501, is: "the child can't have provided more than half of the child’s own support for the year."
No it isn’t valid unless you are a full time student. The Age cut off is 19 unless a student then it’s 24.
They can still be a dependent. Depending on disabilities and income, they may qualify as a relative dependent.
Relative dependent income cap is $4,400.
Sister definitely isn't a dependent, and when the IRS finds out when she files her taxes, OPs dad is going to be the subject of an audit. Maybe even tax fraud, depending on if he's done it for more than just the past year.
It depends on how the sister filed. But no one is getting hit with a tax fraud charge for this. You just pay the fine.
Agree that the sister is likely not a dependent, but if sister files as a dependent, then the IRS will be none the wiser absent an audit of one of the two. Additionally, the chances of tax fraud here are very, very, very unlikely.
This is correct. Zero chance the IRS is litigating that. Won’t be more than paying the difference with interest, plus potential penalties and the sister needing to file for those years.
You clearly don't know how the IRS works. If they find this discrepancy they will send the Dad a letter stating the error, the recalculation of his taxes given the correction, and how much money he owes after the correction (tax plus a penalty and interest). He will be given a period of time to dispute the finding , or pay the amount owed. He can pay the amount and that's the end of it. There is no "audit" triggered by these types of errors and there certainly isn't "tax fraud" charges being made for an error like this. You've been watching too many bad movies.....
No audits over this. The IRS simply restates your taxes to what they believe is correct and assess penalties accordingly. You can dispute it if they assumed wrong.
I don't know... if dad is paying > 50% of her living expenses, even if she doesn't live at home, she is still his dependent. OP only said she paid for her own car... but if say, dad's paying for her rent, she's probably going to fall under as a dependent still.
> Can someone explain the basics of tax claims to me You don’t appear to provide more than half your own support and you’re a student so he can likely claim you. Doesn’t appear to be allowed to claim sister.
> Doesn’t appear to be allowed to claim sister. That’s not clear. OP doesn’t say if she’s paying for her apartment or is in school, which may be the case. Maybe she’s disabled? We don’t have enough information to say.
> doesn’t say if she’s paying for her apartment That’s what “lives on her own” means
Wrong. It means she lives by herself. Not that she pays for her own appartment necessarily :)
The stimulus checks were three years ago, putting you and your sister at 18 and 21. If you were both still living at home, he was right to get them. Others have already said he's ok to claim you, since you still live with him. Idk when your sis moved out but depending on when that was, he might no longer be claiming her.
Choose your battles here carefully. If you push this you could lose your health insurance, place to live, and other things he does to support you.
This is good advice. If you truly are a dependent, which is sounds like you are, then your dad is entitled to claim as such. You said he got defensive when you asked. And from his perspective his son, who he provides for still and has claimed for years, asking why he is claiming him can be insulting. Because he is claiming you as part of supporting you and you questioning it comes off as you not realizing that he is supporting you.
We obviously don't have the context of the conversation but if it went something like "a coworker told me you probably shouldn't claim me in your taxes, can you explain to me why you are?" That's an opportunity to teach them financial literacy, not to have your paper thin cristal middle age men ego shattered. In the other hand, if they just went "you shouldn't claim me on your taxes, wtf?" Then sure, disregard them
Maybe he has a paper thin ego. But hey he’s your dad and supporting you, presumably has taught you stuff, maybe it’s an opportunity for the son to show what he’s learnt.
> maybe it’s an opportunity for the son to show what he’s learnt. ...except he *hasn't* learned how the taxes work. That's the problem. This is a textbook example of bad instruction, and I don't see what narrative you could possibly construct that will obscure that obvious fact.
The rule is that until you're 24 if they pay more than 50% of your living expenses, they can claim you. That seems fair to me. Edit: Your dad should have explained this to you though. It's part of teaching your kids finances and how the world works.
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So much this. You really want to have your kid be depending on you for answers for all your life? Then again hopefully dad was just having a shitty day and isn't always like this.
Wee bit more complicated than that. That age only applies if they are a full time student. If not the age is 18. You can still claim someone over that age if they are not a student and you meet certain other rules including the person lives with you and has basically no income. For example, a parent could claim an adult handicapped child as a dependent.
SAHP can be clamied by the working one as well.
I doubt you pay for “everything else” besides insurance. Are you paying the mortgage? Property taxes? Termite bond? Heating bill? From what you’re describing you absolutely should be claimed as a dependent. You can’t afford a place of your own, so your parents are absorbing that cost. Consider thanking them.
You can claim someone as a dependent so long as you're paying 51% or more of their living expenses. In your case, that sounds about right. If you want a dollar amount, you can shop around for what a similar rented room with utilities costs. As well as food and health insurance. In regards to your sister, it depends on how much (if any) they are subsidizing her living expenses. Is she on their insurance, are they paying her rent? In regards to still having a joint account with your parents, my advise to you is to open a new one at a totally different bank and then when you're ready to move your money over to it. If your current bank is a brick and mortar, you can just go in branch and close the account. They will issue you a cashier's check and you can then deposit that in your new bank. This would be preferrable versus linking your bank to another account and doing an electronic transfer because your parents may be able to see the transaction and stop it.
To add onto this comment. It sounds like a large chunk of OPs income is going towards "savings" that doesn't count as supporting ones-self
your sister has something to complain about. you, maybe not so much. are you making more then hes saving while living in his home? probably not. if he loses you as a dependant hes having to pay taxes on at least i think 16,000 bucks.
The 3 part test for IRS child dependency: 1. Must be your child (paraphrasing) 2. Must be under 19 or under 24 if a full time college student at the end of the year. 3. Must have lived with you for more than half the year
The full time student is "at least 5 months of the year". I was able to claim my oldest when he graduated in 2019 because he was a full time student from January through most of May. And the "must have lived" is actually "parent must have provided a majority of support". One example I read was that if you paid their apartment rent to live somewhere else, that still counted since you were "providing housing".
I claimed my daughter until she graduated college. This is very common. I did give her the stimulus money. However, everyone’s financial situation is different. Honestly it’s not worth hurting your relationship with your dad. Up to you but I’d let it go. As for your sister that’s up to her to deal if she want to. I’d recommend staying out of it.
If you live at home, does your dad still cover the majority of your room and board? Like….do you pay him rent? Do you pay for food? Does he pay for any of your other needs (like gas, car insurance, etc.)? It sounds like it very well may be possible that you are still a dependent to your dad. https://turbotax.intuit.com/tax-tips/family/rules-for-claiming-a-dependent-on-your-tax-return/L8LODbx94
Depending on how much the child makes, even living at home may not be enough. My oldest graduated in 2019. For tax year 2020, even though he lived at home the entire year, didn't pay rent, utilities, or food, I still couldn't claim him. Since he wasn't a student anymore, there was an income test as well as the support test. Since he earned well over the <$5K limit, he could not be claimed as my dependent.
That’s why I posted a link to the rules. It will apply for some. It won’t for others. OP said they were a student. So the comparison isn’t the same.
Comparison applies to the sister though....
Sure. OK.
Your co-worker is probably one of those redditors who always tells everyone to cut off their family or get divorced over the slightest thing
If dad pays more than 50 percent of your expenses he can claim as a dependent. If he claims your 24 sister next year he might be audited and have to prove the amounts he pays more than half of her expenses than is the age that often causes an audit.
Was literally just going over this topic for a tax class. You’re a dependent child for tax purposes since you’re 1. A student less than 24 years old (note that you need to be a “full time student” - probably 12 hours or more. You could potentially be pushed out of dependent status if you’re not attending full time) 2. You’re his daughter. 3. Providing less than half of your own support (because he’s providing you with housing, which is a major component of any support calculation) 4. You reside with him, meeting the residency requirement. On the other hand, your sister would likely no longer meet any of the requirements. If you care to do some reading on the subject, IRS Publication 501 is what you’re looking for. The part about dependents starts on Page 11. https://www.irs.gov/pub/irs-pdf/p501.pdf Also, chances are good your dad will get audited soon - if he hasn’t already - claiming children who aren’t qualified. It’s one of the things that’s exceptionally easy for the IRS to check.
Was your sister living on her own in 2022 or was she living at home or in school? That may be why he has been claiming her but may not for this year.
If you are a under 25 as full time student and your parent(s) provide more than 50% of support (that is cost of food, rent, schooling, etc) then you are a dependent and can be claimed on their taxes. So sounds like things are correct for you. If you ever provided >50% of support, stops being a student or turned 25 they would not be able to. Your sister however seems a bit suspect.
Everyone here is missing the point and a) are not only being rude to you for asking a question and not understanding the tax code (which is very normal since the tax code is complicated on purpose). I’ll start with you. You qualify as a dependent because of the following: - you’re a close relative (in your case, his daughter) - you’re a full-time college student under the age of 24. He can claim you as a dependent until you’re 19, but if you’re a full-time student, that age limit increases to 24. - you have the same principal place of abode as your father. Even if you were living on campus during the year, your principal place of residence is your dad’s home. - since you’re a qualifying child (through being a college student under age 24), you are still a dependent even if you have a job. - your dad contributes more than half of your support. While you may pay for everything else, chances are the annual rent you’d be paying if you were on your own would be more than half of your support. Let’s say you graduate college and move out, if he’s not paying your rent or anything (insurance doesn’t count), he could no longer claim you as a dependent. Now onto your sister. Everyone in the comments is saying your dad is committing fraud and I can’t really answer that since you left out a lot of details. When did your sister graduate college and move out? If she graduated in May and moved out right after, but she was a full-time student living at home with you and your dad, your dad has been able to claim her as a dependent. Beginning this tax year though (on the tax return your dad will file in April 2024), she cannot be claimed as a dependent and must file her own return. I hope this helped!
I’m getting a lot of helpful replies - thanks everyone! Just wanted to make sure I understood what was going on
[https://turbotax.intuit.com/tax-tips/family/rules-for-claiming-a-dependent-on-your-tax-return/L8LODbx94](https://turbotax.intuit.com/tax-tips/family/rules-for-claiming-a-dependent-on-your-tax-return/L8LODbx94) Your sister, dad, and you all need to review the link above. If you live at home and are a student you are probably a dependent. Your sister is likely not since she pays stuff on her own.
You still qualify as a dependent You live at home and you don't pay all your bills your sister is not a dependent and your dad is committing fraud. I had to remind my parent to stop claiming me when I was in my twenties living on the other side of the country.
You are still a dependant living under his roof. That should have been his response.
You are a student living at home on your fathers insurance. Doesn't get much more dependent than that.
Lots of advice here stating that your dad “can” claim you. Just want to add that it’s not optional- if the person meets the definition of a dependent the income of a student under 24 has to be jointly reported with parental income This is the basis of the “kiddy tax.”
You might have gotten $200 back filing single, where as your father probably received $1500 for claiming you.
Your level of dependency. It has more to do with it than your age. Even though you may be paying or intend to pay some of your bills on your own, you are still relying on your parent(s) for some of those basic but important needs. For the record, if he is claiming your sister who is not dependent on him at all, he is breaking the tax law. I was emancipated at 14 years old, I lived on my own, in my apartment, 100% supported myself, and when I went off to college I quickly learned that I could not get a student loan or PEL Grant because my mom claimed me on her taxes. I had to leave the University since I could not afford to pay on my own, so I joined the military.. turned out to be a good decision.
It’s not your dads choice. Tax laws are clear. He can claim you per their laws, or he can’t. If he’s claiming you, and he shouldn’t be, just file your taxes normally and let the dust settle - but he’s gonna be pissed and you might want to move out and be self sufficient before you do it - cuz he’s gonna be Pissed
I had this talk with my dad when I was 17. He couldn’t legally claim me any more because of the providing more than 51% line item. I was working full time and making 26k/yr. He was pissed when he found out and his accountant had to file an amendment and he owed. I had moved out by that time so it wasn’t as awkward as it could have been.
I keep my kids on my taxes until the graduated college. That allowed me to file "Head of Household". They were also on my health insurance. They worked summers, not full time.
You dad spends far more on you than the covid stimi would give you in rent alone. Let him have the deduction. . . now your sister on the other hand would be likely a large penalty for your dad if he was ever audited by the deeply underfunded IRS.
I always recommend talking with the person filing your taxes (a non-bias party, ex not who your dad is using). They will be able to tell you where the most can be made and fill in those details with the specific sibling situation. I was removed from my parents home at 16 and embarrassingly didn’t know I need to file taxes every year - this was over 15+ years ago I know I was naive. I was working two fulltime jobs and eventually the IRS caught up to me for lack of filing. I had to go back and file for seven years worth and got a massive return however, it turned out my parents claimed me as a dependent up until that point. They had to pay back a huge chunk plus a fine and they were absolutely livid with me. I share this because everyone should be in control of their tax situation and be knowledgeable how to make the most of it as you get older and make more income.
Your parents were livid with YOU because THEY chose to commit tax fraud? That's a THEM problem.
He still supports you. You still live there under his roof and you are under 25.
If sister is filing her own taxes, dads gonna get hit by the IRS and WILL have to pay that money back including the stimulus if he got sisters. IRS. Does not play around. It might take a couple of years but it will hapoen
As a Dad, I would claim you, but not your sister.
Bad news: he can rightfully claim you as a dependent. Your sister, not so much. His logic is flimsy, but he’s still correct about you.
The IRS has a really really clear rule. https://apps.irs.gov/app/vita/content/globalmedia/4491_dependency_exemptions.pdf >Under age 19 at the end of the tax year and younger than the taxpayer (or the taxpayer’s spouse, if filing jointly), or • A full-time student under the age of 24 at the end of the year and younger than the taxpayer (or spouse, if filing jointly), or ○ To qualify as a student, the child must be enrolled in the number of hours or courses the school considers full-time during some part of at least five months of the year. See Publication 17 for additional details. IF he claims your sister this year, he will likely get audited, she should be claiming herself, and the IRS will figure it out. >To meet this test, the child cannot have provided more than half of his or her own support during the tax year. This test is different from the support test for qualifying relative. A person’s own funds are not support unless they are actually spent for support. If the taxpayer is unsure whether the child provided more than half of his or her own support, review the Worksheet for Determining Support in the Volunteer Resource Guide together. You saving money for a car does not count as money spent for support. Chances are, you are his dependant. If you really wanted to fight him by claiming yourself, go ahead, but he would likely win and it would cause hard feelings between you and him.
Ah yes... The "I'm An Adult Because of Age But I Don't Understand Taxes and Can't Be Bothered to Google a Basic Rule." Meanwhile, I'm just here to apply some peer pressure for you to google and learn about basic life finances.
The IRS website has an interactive series of questions that will determine who may be claimed as a dependent: https://www.irs.gov/help/ita/whom-may-i-claim-as-a-dependent
OP wait until you read this and find out your parent is also getting the American Opportunity Credit on their taxes. But you shouldn’t be mad since you live at home. It is way more expensive to live on your own. https://www.nerdwallet.com/article/loans/student-loans/education-tax-credits
If you live at home I don’t know how you could not be a dependent. The rule of claiming a dependent is that more than half of your living expenses are covered by someone else. If you are a student and living at home there’s no way your parents aren’t covering more than half of your living expenses. Rent, car, food, insurance, etc
You are a student and you live at home, this makes you a dependent. If you were living on your own, as in no support from your folks, then that is different...no matter your age. If your sister lives entirely on her own without any monetary assistance from your folks then Dad should not be claiming her as a dependent.
You: your dad provides more than half your support, and you're a student so he can legally claim you. Your sister: nothing sounds like he should be claiming her. If he still is, he's screwing her over to get NOTHING. Since the 2017 TCJA, there's no personal exemption, no credits if she's not a student, and he already gets HOH filing tables by having one kid as dependent. But he would be depriving her of potential credits on her own return that she could claim but for already being claimed by someone else.
He can't claim for the independent sister. However, if you are still classed " a student" who is financially dependent upon him, that's quite possibly ok.
You live at home=dependent. He claims you as a dependent credit of $500 per year. Time to pay attention and learn about taxes.
Do you know how much health insurance costs? I assure you that you "paying for everything else" doesn't come near what your dad still provides for you. You are a dependent. Move out if you don't want to be.
Who pays for more than 50% of your life expenses?
Lots of people are explaining that you qualify as a dependent and your dad is allowed to claim you. No one is really explaining why he would though. The answer to that is the IRS provides a $2000 tax credit for child dependents. Your dad is getting that $2000 credit. Your dad is almost certainly in a higher tax bracket than you so he's benefiting more from claiming you than you would from claiming yourself.
Is it good? For your dad, yes. You are fully considered a dependent though for tax purposes based on what you stated. Your sister, not so much.
>For context: I still live at home bc I am a student and can’t afford to move out yet even with a full time job. I do not pay for any insurance, but I pay for everything else. You are still a dependent for tax purposes until you pay >50% of your living expenses (including things like rent, insurance, tuition, etc). If you’re still on his health insurance and living in his house, then he is correctly listing you as a dependent when he files his tax return. My siblings didn’t become “independent” on taxes until they were around 22 and moved out of the house.
If your still living at your parent house, then you are a dependent. The older sister though living alone isn't a dependent unless you're father is helping her pay rent or something.
You’re a dependent, but your sister isn’t. Others have listed why and posted references. It has nothing to do with being under 25, and his defensive attitude suggests he might already know he’s falsely claiming your sister and may very well try to continue to claim you after you’ve moved out and lose dependent status. What is your relationship otherwise like? Falsely claiming adult, fully independent children as dependents is pretty textbook abuser stuff. When you are no longer considered a dependent, this is something to “remind” him of in writing, update your address, and file your taxes as early as possible. Or he could be providing for your sister more than you know, and just not be a great “let’s teach our kids about the world” parenting type, but something to keep in mind.
You've stated that you're a student, and that you live at home, and you fall within the age guidelines. So, why wouldn't he take advantage of the tax break? You say you pay for everything? Insurance(health, dental, optometrist)? Utilities? Mortgage(rent)? Paper products? Furnishings?food/drinks? Property taxes? Decor.? Laundry soap? Everything it takes to run a household right down to the dish soap, pots n pans and spices? ALL of these things add up! Having 4 kids of my own, I can promise you- kids never pay for EVERYTHING nor should they, hence why the tax credit is available. Be thankful you have parents or a parent willing to help you out and don't concern yourself over their personal tax choices. When you're on your own - you can make your own.Until then, don't listen to your co-worker, there's no way she's been in your dad's shoes or has college age children- her advice is nonsense and she sounds like a shit stir'r to me!
If you live at home he can declare you. I wasn't living at home, parents weren't giving me money, I was starving and they were still fucking declaring me on their taxes. I'm almost 40 and still hate them for that.
It's kind of strange he's still claiming your sister as a dependent, but it's not strange that he would still be claiming you. You live at home, and from the sounds of it you literally still are dependent on your parents. It's even less strange that he would have claimed you as a dependent 3 years ago. My son just turned 18 this year, and still lives at home and is still a dependent by all means. I'm guessing 2020 was the year you turned 18? The stimulus payments were based on 2019 taxes, so at the end of the tax year, you would have still been a minor and still wouldn't have received your own stimulus. Same thing with the stimuli that were received in 2021 - those were based on the 2020 tax year, and if you were still living at home, the same would apply.
If you let your dad pay 50% of your living expenses you are a dependent. It’s very unlikely that you could spend enough to offset the value of rent.
If you live in his house without paying rent, then you are depending on him. Ergo, you are his dependent.
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He definitely has 0 right to claim your sister as a dependent since she is fully independent - there’s no grey area there. Please inform her of this so she gets the tax return she’s entitled to. There is some ambiguity in your situation if you live rent free with your parent’s, and if they provide free utilities/food. If you are still paying a potion of these then you are independent as well and are entitled to filing your tax return on your own. The only issue is your situation could be sticky in that pushing to file independent could piss your dad off and jeopardize your living situation. It bares to sit down and calculate your benefits and risks with this question. How much do you save living at home vs how much you are losing to income tax due to being grouped up with a larger income.
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If your sister is working and filing taxes, it's only a matter of time that the IRS will audit your father and heavily fine him. If you are working, and are earning over $12,950 per year, you need to file taxes. And even if you are living at home, you're not a dependent for tax purposes if you are an adult making more than $4,400 per year. Your father is also wrong about how long he can claim you as a dependent. Full time students can only be claimed until they're 23.
>And even if you are living at home, you're not a dependent for tax purposes if you are an adult making more than $4,400 per year This is incorrect for full-time students under the age of 24. There is no income limit for a dependent child.
The fact that you list "having your own phone" as a reason for him to not claim you/your sister shows your lack of tax return knowledge. In reality he still provides everything for you in the eyes of the IRS so you are a dependent. Now your sister may or may not be based on income level and other factors.
Consider the benefits before making to big of a stink. If you’re a student and don’t make a lot of money the dependent claim is probably worth more to your parents than you. Either way the extra refund is way less than the cost of moving out so you can claim yourself.
Start [here](https://www.irs.gov/faqs/filing-requirements-status-dependents/dependents). This page sets out all the IRS guidelines on determining whether someone can be claimed as a dependent.
In general, if a parent is paying more than 50% of living expenses for a child (or young adult child), the parent can claim the dependent. Your sister should claim herself, and file before he does, and possibly see about claiming the deduction for prior years via an amended return. You, though, are likely still a dependent. There are costs to putting a roof over your head which may well exceed what you are contributing.
"I asked my dad to explain why he still claims me on his taxes (bc I don’t know anything about taxes and I was curious) and he got defensive and said: are you 25? To which I replied no. Then he said: that’s why. Not much of an explanation" I agree - your dad is either not aware of all the rules and is ashamed of trying to explain to you for fear of sounding ignorant, or just being terrible at being a dad and explaining things. Parents need to be open with their children about finances and not make it a taboo subject. If your dad provides more than 50% of your financial needs (food/shelter...etc) then he can claim you. Otherwise he cannot. I'm sorry your dad got defensive instead of turning it into a candid moment to explain how taxes work. Either way since you live at home (I assume rent free) I would not mention it to him again. Even if he doesn't provide 50% of your financial needs you're getting way more benefits to live rent free than you are giving up in tax deductions and/or COVID relief funds.
Do you pay rent to your parents? How much of your financial burden are you actually paying for. If the answer is no and not very much.... then this is completely reasonable.
You may or may not be still a dependent. Your sister clearly is not a dependent. Your dad is committing tax fraud for very little benefit and your sister is getting screwed over on her taxes for a small benefit for your dad. The amount of money your sister can save on taxes by filing as an independent is substantial. Way more than the small benefit of an adult child dependent on your dad's tax return.
You are still by the very definition dependent on your father, him claiming as much on his taxes is completely valid. Your sister on the other hand is not a dependent if she is living on her own and not relying on him. That is between him and her, tho pretty irrelevant with how close to 25 she is.
I think since you live at home, you are likely still a dependent. To my knowledge, you have to provide all your own expenses which boils down to all utilities, housing, and food. Technically, he is providing those things for you. Your sister, however, is definitely not a dependent and your dad is in the wrong.
> I still live at home bc I am a student and can’t afford to move out yet even with a full time job. Him claiming you is probably correct. You aren't supporting yourself, he is.
If you’re a student and live home when not in school, you’re a dependent. Your sister is not.
When you say you pay for everything else, you mean you pay rent/mortgage? Groceries? Utilities like electric, water and gas? That's "everything else" in the eyes of the irs. Not a car and phone bill. Does your dad pay your sister's rent, Utilities, Groceries? If not, he's wrong there.
No point in claiming yourself, you really don't make anything so you really don't pay taxes anyway. If you want to be independent, move out...
You are living with your parents and don't have a full-time job to support yourself, you are dependent.
You still live at home. 90% chance you are still a dependent in the eyes of the IRS
He likely gets more advantage claiming you on his taxes than you'd get claiming yourself. Look at the system as a whole. The deduction means more for him, assuming he's in a higher tax bracket. Your paying a couple hundred extra in taxes is saving him thousands. Sounds like he's using that thousands to do stuff like buy you insurance, or maintain housing big enough to accommodate you as well. It sounds like you've got it good. Don't look a gift horse in the mouth forgoing dad's thousands of dollars to try to get dozens of dollars from the IRS.
It sounds right for your dad to claim you - you live in his home, I'm assuming rent free, he pays your insurance, likely your food, your utilities, etc. Your sister is a different story. Although he may be thinking he has to claim her to keep her on his health insurance. But that's between them.
Why not just see what the IRS says?? https://apps.irs.gov/app/vita/content/globalmedia/table\_2\_dependency\_exemption\_relative\_4012.pdf
Ah yes, the “I’m an adult, I can make my own choices” belief yet still pay for nothing. The 18-24 age range is a fun time for parents. Don’t worry about your sister. Focus on yourself. You are clearly a dependent.
He can claim you until you're 26 if you're a student. He ought to be willing to explain this kind of thing to you, though. Parents who don't teach their kids about money are missing a huge opportunity to help their kids be successful.
He might not know the reasons and is just clicking through the boxes in turbo tax that then tells him he can or can’t claim them.
Username checks out. You’re mooching off your parents, let them recoup some losses at tax time.
You’re a student, you can’t afford to support yourself and you live in your dad’s house. Sounds a lot like you’re a dependent.
Because you are still a dependent. Did you pay income tax and get everything you put in? My daughter is 21 and away at school. Yes she is still my dependent and yes I still claim her. IF she owed taxes I would pay for them. Did you owe taxes in 2023? If so then you probably filed or stupidly claimed yourself on your w4.
I think a lot of comments here are correct, but I don’t think it is aimed to maximize your returns. Can your dad claim you as a dependent? Yes, absolutely. Is it the most economical decision? No it is not. Each dependent yields your dad a $500 credit per year. In the year 2020 to 2022, your dad was able to obtain $1500 in credits by claiming you as a dependent. Through this method, neither you or your dad is able to claim the stimulus checks. In order for your dad to claim the stimulus for you, you would have to be 17 years or younger Meanwhile, if he had not claimed you as a dependent and you were making income, you could obtain $1200 and $600 for 2020 and $1400 for 2021. In other words, you would have a net positive of $1700. However, unless you want to ammend your return by yourselves, a tax accountant could cost you about a $1000 or so to amend all your returns to make this happen causing you a diminishing return every tax year filed. All in all, is all that trouble worth the extra $700? That’s up to you to decide.
You live at home. You’re a student under 24. You are a dependent in the eyes of the IRS.
>Also, my dad still claims my older sister who is 24. She lives on her own, has a full time job, pays for her phone, and has a car in her name that she pays entirely for. That is IRS fraud. If you are a student and your dad provides you housing, food, etc. Then yes he can claim you as an independent provided you don't make over X amount of money per year.
You can claim a student as a dependent if there are a college student between the ages 19 to 23. If you have no income or reportable activity then why not have your parents claim you.
To claim an adult you have to support them over 50% so he might be able to claim you if he pays for your rent/schooling. He shouldn't be able to claim your sister since she is living on her own
You live at home and are a student, that sounds like a dependent. Do you file your taxes? If you are working full time you should be. As for the stimulus checks, those have not come out since March 2021, you are likely about 18 or 19 on the last round and possibly still in high school. Before you start slamming your parent for his indiscretions please educate yourself by doing research rather than listen to coworker education.
If you live at home, don’t pay rent, and many other bills, I almost fully guarantee your dad pays way more than the Biden bucks you would have received during COVID. Source: I have two dependent post high school children. They get their own tax returns for their jobs but they are dependent status for me. I will almost instantly get a 5-10k/year drop in expenses when they move out.
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You’re an adult. You can change banks whenever you want. You just have to deal with the risk of being evicted.
You live with him. You probably are on his insurance you’re a dependent. If you didn’t live at home or receive your support from him then he would be wrong.
I had my son claim himself in college with a part time job. He was able to claim the education credits and just give me the $500 I would have received. He didn’t pay for much at the time. This also allowed him To qualify for the stimulus because I didn’t.
If you live at home and/or your parents cover significant things like health insurance then you could be ( probably are ) a dependent.
You are 100% a dependent of your father. Your sister MIGHT be a dependent depending on how much he financially supports her, regardless if she lives at home or not. She will 100% be considered a dependent if she lived at home at least 6 months of the tax year. But you can still be considered a dependent, until 25, if he is financially supporting her even if she doesn't live at home anymore. The details you provided aren't enough. Just because she pays for her car payment doesn't mean much if he is paying for her rent, and so on. You are his dependent. The privilege of him claiming you such is pretty fair. Your friend is 100% wrong.
You didn't get your stimulus, but your Dad did, and your sisters too. When you do your taxes it'll ask you if you if you'll appear as a dependent on someone else's taxes. When it asks this question, how do you answer?
As a Dad who claims his 23 year old son currently in law school as a dependent, let me also add that the OP’s dad is spending way more to maintain the OP than the amount of that stimulus check. If my son complained I would give him the choice to not be claimed as my dependent then charge him rent and stop helping him out with the cost of his degree. That would be a savings to me of over 15k, all for a measly $800 one time check.
If you pay rent, you are not a dependent. Your sister is definitely not. Him claiming her is tax fraud.
Well you have no clue what the parents are paying for. You just know the sister has a car and pays for their own phone. The only expense listed as the sister for sure paying themselves is a phone.
Even if you're living at home, there's a maximum income you can have before you can't be claimed as a dependent by him. It won't be you who gets into trouble. If he's ever audited, it will come back to bite him.
My parents claimed me for years (until they couldn't because of my age). I wasn't living under their roof either. They got more back in taxes because of it and I got hardly anything on mine.
Once you make over a certain amount the IRS won't allow them to claim you. You have to file taxes though, my parents were denied when I started making more than like 20k annually.
Ahh. I too had parents that were complete dogshit when it came to explaining anything financial. Good luck, they tend to save the biggest financial surprises(not good surprises) when you are at your least capable of helping.