Accounting/Tax Question?

Question

Please help me:

"Don and Mary Dewey are successful professionals with a combined AGI of $400,000. Their household includes 2 kids: Deb (age 16) and Van (age 23). Van isn't a student but works a part time job, making $16,000. Don heard that it might be beneficial if Van, rather than Don and Mary, claims Deb as a qualified child for income tax purposes. At a Chamber of Commerce meeting, Don asks you to advise him on this matter."

Please explain the differences between Don and Mary claiming Deb, vs. Van claiming her. Thanks!

Judy · Accepted Answer

Financially, Van might get more from claiming her if he could claim her.  But it would be illegal.  Only Don and Mary can legally claim Deb since they are her parents.

tro · Answer

do not offer advice
will tell you what the rules are
the income? is it self employed or wages
Van is no longer a dependent, he will file his own tax return on his own income
and Van is not the parent of Deb, he has no eligibility to claim her

rtfm · Answer

Um. Van isn't allowed to claim his sister as a dependent unless he's paid more than half her support for the year. You should tell Don he needs to stop listening to tax advice from unqualified people. What they're suggesting is tax fraud.

And you should know this yourself just from studying your notes and textbook. This is a BASIC, UNCOMPLICATED tax question.

Olie · Answer

Van can not claim Deb unless he is supplying at least 50% of Deb's support.

Bostonian In MO · Answer

This isn't a homework board.  You'll find the answer to your homework question in IRS Pub 501 http://www.irs.gov/pub/irs-pdf/p501.pdf

Hint:  The first answer is not correct, but not for the reason that he apparently thinks.

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Accounting/Tax Question?

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