Tax Doctor Questions - Dependents & Exemptions.
March 31, 2017
1. Is there an age limit on claiming my child as a dependent?
To claim your child as your dependent, your child must meet either the qualifying child test or the qualifying relative test:
2a. I claim my son as a dependent, he is a full-time college student at Southern University (SU). When he files his return can he claim his own personal exemption?
If you can claim an exemption for your son as a dependent on your income tax return, he cannot claim his own personal exemption on his income tax return and he should check the box on his return indicating that someone else can claim him as a dependent.
2b. Is there a certain amount of income he can make as an unmarried dependent student before he has to start filing his own income tax returns?
An unmarried dependent student must file a tax return if his/her earned or unearned income exceeds certain limits. Even if you don't have to file a federal income tax return, you should file if you can get money back (for example, you had federal income tax withheld from your pay or you qualify for a refundable tax credit).
3. I owed taxes in 2015 and I am still making payments under an installment/payment plan can I receive a tax refund for 2016?
No, one of the conditions of your installment agreement is that any refund due to you, the IRS will automatically apply against taxes you owe. Because your refund isn't applied toward your regular monthly payment, continue making your installment agreement payments as scheduled until you pay your liability, including accrued penalties and interest, in full.
If your refund exceeds your total balance due on all outstanding liabilities including accruals, and you don't owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support, you'll receive a refund of the amount over and above what you owe.
4. Do I have to claim my child as a dependent in order to qualify for head of household filing status?
Generally, to qualify for head of household, you must have a qualifying child or dependent. However, a custodial parent may be able to claim head of household filing status with a qualifying child even if he or she released a claim to exemption for the child.
5. I pay child support for my kids, can I use these payments as deductions? Will I be able to claim a dependency exemption for them?
No, child support payments are neither deductible by the payer nor taxable income to the recipient. However, the payer of child support may be able to claim the child as a dependent:
6. Tax Doctor I am married and my wife and I file separately. Both of us contribute to the support of our daughter. Can we both claim a dependency exemption for her on our separate returns?
No. A dependency exemption for a child may only be claimed on one return in a tax year.
7. I think I made a mistake on my federal tax return that I’ve already filed. What should I do?
It depends on the type of mistake you made:
8. I retired last year, and started receiving social security payments. Do I have to pay taxes on my social security benefits?
Social security benefits include monthly retirement, survivor and disability benefits. They don't include supplemental security income (SSI) payments, which aren't taxable. The net amount of social security benefits that you receive from the Social Security Administration is reported in Box 5 of Form SSA-1099, Social Security Benefit Statement, and you report that amount on your income tax return (Form 1040, line 20a or Form 1040A, Line 14a). The taxable portion of the benefits that's included in your income and used to calculate your income tax liability depends on the total amount of your income and benefits for the taxable year. You report the taxable portion of your social security benefits on Form 1040, line 20b or Form 1040A, line 14b.
To find out whether any of your benefits may be taxable, compare the base amount for your filing status with the total of:
If you're married and file a joint return, you and your spouse must combine your incomes and social security benefits when figuring the taxable portion of your benefits. Even if your spouse didn't receive any benefits, you must add your spouse's income to yours when figuring on a joint return if any of your benefits are taxable.
To claim your child as your dependent, your child must meet either the qualifying child test or the qualifying relative test:
- Qualifying child test, your child must be younger than you and either younger than 19 years old or be a "student" younger than 24 years old as of the end of the calendar year.
- There's no age limit if your child is "permanently and totally disabled" or meets the qualifying relative test.
- In addition to meeting the qualifying child or qualifying relative test, your child must also meet all the other tests for claiming a dependent:
- Dependent taxpayer test
- Citizen or resident test, and
- Joint return test
2a. I claim my son as a dependent, he is a full-time college student at Southern University (SU). When he files his return can he claim his own personal exemption?
If you can claim an exemption for your son as a dependent on your income tax return, he cannot claim his own personal exemption on his income tax return and he should check the box on his return indicating that someone else can claim him as a dependent.
2b. Is there a certain amount of income he can make as an unmarried dependent student before he has to start filing his own income tax returns?
An unmarried dependent student must file a tax return if his/her earned or unearned income exceeds certain limits. Even if you don't have to file a federal income tax return, you should file if you can get money back (for example, you had federal income tax withheld from your pay or you qualify for a refundable tax credit).
3. I owed taxes in 2015 and I am still making payments under an installment/payment plan can I receive a tax refund for 2016?
No, one of the conditions of your installment agreement is that any refund due to you, the IRS will automatically apply against taxes you owe. Because your refund isn't applied toward your regular monthly payment, continue making your installment agreement payments as scheduled until you pay your liability, including accrued penalties and interest, in full.
If your refund exceeds your total balance due on all outstanding liabilities including accruals, and you don't owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support, you'll receive a refund of the amount over and above what you owe.
4. Do I have to claim my child as a dependent in order to qualify for head of household filing status?
Generally, to qualify for head of household, you must have a qualifying child or dependent. However, a custodial parent may be able to claim head of household filing status with a qualifying child even if he or she released a claim to exemption for the child.
5. I pay child support for my kids, can I use these payments as deductions? Will I be able to claim a dependency exemption for them?
No, child support payments are neither deductible by the payer nor taxable income to the recipient. However, the payer of child support may be able to claim the child as a dependent:
- The child is the qualifying child of the custodial parent, and the custodial parent is generally allowed to claim a dependency exemption for the child, if the other tests for claiming the exemption are met. The parent with whom the child lived for the greater part of the year is the custodial parent for income tax purposes.
- The noncustodial parent may claim an exemption for the child if the special rule for a child of divorced or separated parents (or parents who live apart) applies. This requires in part, that the custodial parent sign a Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, or a substantially similar statement. The noncustodial parent must attach it to his or her return.
6. Tax Doctor I am married and my wife and I file separately. Both of us contribute to the support of our daughter. Can we both claim a dependency exemption for her on our separate returns?
No. A dependency exemption for a child may only be claimed on one return in a tax year.
7. I think I made a mistake on my federal tax return that I’ve already filed. What should I do?
It depends on the type of mistake you made:
- Many mathematical errors are caught during the processing of the tax return and corrected by the IRS, so you may not need to correct these mistakes.
- If you didn't claim the correct filing status or you need to change your income, deductions, or credits, you should file an amended or corrected return using Form 1040X, Amended U.S. Individual Income Tax Return.
- When filing an amended or corrected return:
- Include copies of any forms and/or schedules that you're changing or didn't include with your original return. To avoid delays, file Form 1040X only after you've filed your original return. Generally, for a credit or refund, you must file Form 1040X within 3 years after the date you timely filed your original return or within 2 years after the date you paid the tax, whichever is later.
- Allow the IRS up to 16 weeks to process the amended return.
8. I retired last year, and started receiving social security payments. Do I have to pay taxes on my social security benefits?
Social security benefits include monthly retirement, survivor and disability benefits. They don't include supplemental security income (SSI) payments, which aren't taxable. The net amount of social security benefits that you receive from the Social Security Administration is reported in Box 5 of Form SSA-1099, Social Security Benefit Statement, and you report that amount on your income tax return (Form 1040, line 20a or Form 1040A, Line 14a). The taxable portion of the benefits that's included in your income and used to calculate your income tax liability depends on the total amount of your income and benefits for the taxable year. You report the taxable portion of your social security benefits on Form 1040, line 20b or Form 1040A, line 14b.
To find out whether any of your benefits may be taxable, compare the base amount for your filing status with the total of:
- One-half of your benefits; plus
- All of your other income, including tax-exempt interest.
- The base amount for your filing status is:
- $25,000 if you're single, head of household, or qualifying widow(er),
- $25,000 if you're married filing separately and lived apart from your spouse for the entire year,
- $32,000 if you're married filing jointly,
- $0 if you're married filing separately and lived with your spouse at any time during the tax year.
If you're married and file a joint return, you and your spouse must combine your incomes and social security benefits when figuring the taxable portion of your benefits. Even if your spouse didn't receive any benefits, you must add your spouse's income to yours when figuring on a joint return if any of your benefits are taxable.
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