Students – Don’t be in such a hurry to file your return that you cost your parents!
Students that work part-time jobs often have more tax withheld from their paychecks than the actual tax assessed when they file their return. They are then, understandably, in a hurry to file their return to get some spending money from their refund.
However, if they don’t fill their return out correctly and claim a personal exemption for themselves, their parents won’t be able to claim them. The parents often, not knowing the consequences of their student filing their return in January or February, rightfully claim the student as a dependent. Since this results in both parent and student claiming the same person (and SSN), the parents return is adjusted so that they don’t get credit for the refund. This could cost the parent approximately $1,500 to $2,000 depending on their tax bracket. Amended returns for both parent and student can be prepared but this is costly and no one wants to file amended returns if they don’t have to.
A better solution is to make sure the student holds off in filing their return until the parents file their own return or at least have a professional tax preparer determine that it is ok for the student to file.
Contact us for more information.
