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Tax refund question

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Posted 02-02-2012, 04:46 PM

akkkmed

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Tax refund question

This is my first time filing taxes. I worked last summer - about 50 business days. My parents and other people say I should be getting almost all of it back. But I'm not (apparently.) I live with my parents, so I'm a dependent on their taxes. I'm a full time student.I've done my federal and state taxes both on Turbo Tax and H&R Block (both online free versions.)

Income: $8580
Federal taxes: $977
State taxes: $308
Federal return (estimated): $698
State return (estimated): $49

I also have city taxes, but I haven't done them yet since I can't efile them.

So.....I thought I'd ask here in case anyone has any experience. I made so little money, yet they're keeping a lot. Right? Wrong? Thanks for the help.

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02-02-2012, 04:46 PM
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02-02-2012, 05:03 PM

PiratesSayARRR Pirate's Life For Me Member sinceOct 2004 Posts11,066 LocationSan Diego Reputation 768 Followers 1 + Give Rep	They are keeping a lot? You should get back around $700 bucks. $8,580 less Standard Deduction ($5800) = $2,780 x 10% = $278 in Income Tax. $278 / $8,580 = 3.2% effective tax rate. For comparison sake my effective tax rate for IRS this year was 17% Hate is a strong word... but I really really really don't like you
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02-02-2012, 05:28 PM

bta15 L3: Novice Member sinceNov 2006 Posts153 Reputation 27 Followers 0 + Give Rep	You paid almost $1100 in taxes and getting about $730 back. Seems legit to me. If you're parents weren't claiming you as a dependent I am guessing you would get it all back and then some after the earned income credit and education credit. But that would cost them more money than you would gain. I ran the turbotax taxcaster app on my phone and got the same numbers as you.
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02-02-2012, 05:52 PM

dcrob

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I was talking to someone today about a person being claimed as a dependent. They stated that their parent could not claim them as a dependent because she (the student) made too much $ this past year. She is a 19 yrs old full time college student and income was only about $5500. I was wondering if this is true? Or are there certain situations that would be beneficial for the student not to be claimed as a dependent, such as for financial aid reasons?

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02-02-2012, 07:08 PM

Shellac

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Your parents can only claim you as a dependent if they provided more than half your support for the year. So if they spent more to take care of you than you made they can claim you.

I know there are also income limits for dependents who are qualifying relatives other than children but I don't know if the same type of limits apply to children.

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02-02-2012, 07:15 PM

discostu58

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Quote from PiratesSayARRR

They are keeping a lot? You should get back around $700 bucks.

$8,580 less Standard Deduction ($5800) = $2,780 x 10% = $278 in Income Tax.

$278 / $8,580 = 3.2% effective tax rate.

For comparison sake my effective tax rate for IRS this year was 17%

Thats way better than my effective rate of 27%...

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02-02-2012, 08:10 PM

PiratesSayARRR

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Quote from dcrob

She is 19 years old giving tax advice. She doesn't know what she is talking about. Smilie

Quote from discostu58

Thats way better than my effective rate of 27%...

Amen.

Last edited by PiratesSayARRR; 02-02-2012 at 08:10 PM.. Reason: Automerged Doublepost

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02-03-2012, 05:57 AM

XReflection

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Quote from dcrob

Being claimed as a dependent ultimately just makes it so that whatever tax benefits you would have received (e.g. deduction of loan interest) is applied to your parents return instead of yours. I'm filing independent for the first time this year and it is more beneficial to you. But I think the net effect between you and your parents stays relatively the same, it's just a matter of who is affected.

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02-03-2012, 07:59 AM

akkkmed The one and only Original Poster Member sinceNov 2007 Posts2,609 Reputation 391 Followers 0 + Give Rep	Thanks guys. Reps were given to those who helped. I asked my cousin who's a CPA and he said the same thing - it's because I'm a dependent. Since I'm a dependent, my parents get a bigger cut than I would if I wasn't their dependent. So it helps them more than me. Oh well...
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02-03-2012, 08:52 AM

PiratesSayARRR

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Quote from discostu58

Thats way better than my effective rate of 27%...

Was that just your fed effective rate? Or inclusive of state?

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02-03-2012, 10:06 AM

discostu58

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Quote from PiratesSayARRR

Was that just your fed effective rate? Or inclusive of state?

Fed only...

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#12

02-03-2012, 09:23 PM

Tel0004

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Quote from XReflection

But I think the net effect between you and your parents stays relatively the same, it's just a matter of who is affected.

Being claimed by their parents should usually be a better deal overall, since (I hope) their parents are in a higher marginal tax rate. Plus, there might be other advantages. If the OP is an only child (or the only child still living at home), then if they didn't claim them as a dependent, they would also loose out on the head of household deduction. But the tax code is quite complex, for all I know the OP's parents itemize their taxes, so the standard deduction means nothing.

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02-04-2012, 10:52 AM

PiratesSayARRR

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Quote from Tel0004

Being claimed by their parents should usually be a better deal overall, since (I hope) their parents are in a higher marginal tax rate. Plus, there might be other advantages. If the OP is an only child (or the only child still living at home), then if they didn't claim them as a dependent, they would also loose out on the head of household deduction. But the tax code is quite complex, for all I know the OP's parents itemize their taxes, so the standard deduction means nothing.

You don't get this deduction if you are married only if you are a single parent.

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