Making work pay credit & students

[oceanlovin'ea]

If a student is working and earns $12,000 but is still claimed by parents because they are a student, do they not get the Making work pay credit?

I am amending a return because the student went to a tax service and they filed her as claiming herself (even though last years return showed she didn't claim herself) and her parents should claim her and they need to claim her.

But when I did the return, it took the MWP credit away.

Linda

[oceanlovin'ea]

worksheet

the worksheet on the back of 1040EZ says if you can be claimed as a dependent, you do not qualify for this credit.

THAT REALLY STINKS!!!!

Linda

[ChEAr$]

the worksheet on the back of 1040EZ says if you can be claimed as a dependent, you do not qualify for this credit.

THAT REALLY STINKS!!!!

Linda

Stinks? Depends,.

Yesterday student made 15,000, 23 years old, college student. Since she didn't
claim herself, she didn't get the $400 Obama money of course, and paid tax on
her lost exemption, but.....parents claimed $2,500 worth of American Opportunity
credit. Is this a great country or what?

[Burke]

Just had one, same scenario. College daughter filed and claimed herself and mailed it to IRS. We are waiting for refund to process so she can pay back MWP credit and parents can claim as dependent with education credit. Hopefully, this will process before 4/15 as parents will still owe. And her 1040X will probably have to process first, so parents don't lose the dependency exemption. WHY do they let their kids do this?

[gkaiseril]

Because they do not know the rules for dependents, education credits, and tax rates. Maybe you could do a pre-tax season seminar for parents and children and show both of them what having a dependency claim on the parents return means to the entire family.

[BP.]

WHY do they let their kids do this?

Because after a semester of higher education, the child becomes brilliant, has their boyfriend/girlfriend file their taxes 17 Jan at some free online site, is delighted with their $361 in beer vouchers, and whines and moans that "letting" their parents claim them really messes up their refund. I overhear these goofy conversations every season.

[Jiggers]

But the parents could stop it

Because after a semester of higher education, the child becomes brilliant, has their boyfriend/girlfriend file their taxes 17 Jan at some free online site, is delighted with their $361 in beer vouchers, and whines and moans that "letting" their parents claim them really messes up their refund. I overhear these goofy conversations every season.

Yet the parents will probably decide to let the child get away with this.

They don't won't to use that forbidden word "NO".

[David1980]

Yet the parents will probably decide to let the child get away with this.

They don't won't to use that forbidden word "NO".

Well at the same time I think preparers assume too easily that a child does qualify without checking all the rules. Someone has a 22 year old son who is in college and rarely does anyone even bother asking questions about support, it's just assumed that they qualify. And why not, most of the time there's a better tax benefit if the parent claims the child and the IRS will never question it unless both child & parent claim child.

I think back to my own college, and for most of my college career I was self supporting. That is to say I had student loans that paid my expenses. I didn't have a room at my parents house, I didn't return home for summers, and they did not provide any assistance. I knew a lot of other students who also had parents who didn't support them and relied upon student loans. But of course my parents claimed me and I didn't know any better.

Actually back then it would have been on the older child tests so I don't know what that support test actually included, but today I wouldn't have qualified because I paid over half my own support - but this rarely gets questioned.

[taxea]

As soon as a client's child is of college age I tell my client to be sure and drum into the child they are the client's dependent if they are going to do their own return. Saves a lot of 1040X's.
Also you don't need to wait to file the parent's return it has to be manually filed anyway and it will all come out in the wash once the child's 1040X is sent.

[S T]

Selective Hearing

Had several of these in years past

Kids do NOT Listen and do NOT read the rules

Parents need the control of the KIDS tax returns until such time as they are not claiming their "children"

Sandy

[oceanlovin'ea]

a big mess

Student went to HRB, different preparer than last year. They had last year's return that showed she didn't claim herself then. They also did RAL which she paid around $100 for.
So she got her refund fast and she has spent the money. Now she owes $875 back to IRS when we do 1040X. But she only got around $776 because of the charges.
Parents lose exemption and education credit which costs them around $950.

So it is a toss up. Who pays??

Parents owed from last year and this year refund would pay it off. Now they will still owe.

I think they should go back to the office and complain to the office manager that this preparer did not do a thorough job of interviewing this young girl. If you mark a return as a student, you should know that they will probably be claimed as a dependent by them.

I would be just as frustrated if this return had been done by anyone else. I am not picking on HRB. Just on inadequate preparers.

Linda

[S T]

Dependents

So inept preparers are out there, but also in their defense, some clients such as students just don't play by the rules either. Sort of like that Garbage In/Garbage Out theory! Afterall, these College Students just obtained their "degree" and they now know "everything" - I have one that is making a $ 135K in 2009, but can't understand with his degree how possibly he can owe any "Tax" - and his degree is in "finances and business major"

College kids in particular - little" Mr/Miss know it alls" so they think they are no longer dependents in year 2010, when in reality they were dependents in 2009 (yes) they were still in school, and Mom and Dad were still supporting them. But do they remember that, of course not!

It is that "thing" about which year - "kinda like" that fiscal year versus calendar year, which I always have an issue with fiscal year and which year it belongs to.

Sandy