Tax School

Ultimate Guide to Student Taxes

Updated for Tax Year 2015 (for returns filed in 2016)

College is awesome, right?  For most of us, it’s the first time we tasted freedom.  The freedom to do whatever, whenever you want.

The downside is that you have more responsibility, too, especially on financial matters.  You get bombarded with credit card offers designed to put you in debt and keep you there.  You may have to work to support yourself, at least partially.  And your parents may no longer be doing your taxes for you.

If you’re new to taxes they can be overwhelming.  Especially for college students, given the special rules and benefits you may be eligible for.  Don’t worry, we’ve got you covered with this Ultimate Guide to Student Taxes.  And, unless you’ve got some offshore bank account in the Cayman Islands, it’s really not that complicated.

This guide covers the following topics:

1. Do you need to file a tax return?

2. Determine if you can be claimed as a dependent by your parents

3. Student Tax Credits

4. Form 1098-T

5. Scholarships and Grants

6. Tax-free Savings Accounts

7. Student Loan Interest (Form 1098-E)

1. Do you need to file a tax return?

The short answer – if you earned any income in 2014, you should file in 2015 even if you’re not required to.  Why?  To get a refund!  Most likely Uncle Sam withheld taxes from your paychecks.  Usually he takes too much.  File a return and get some of your money back!  You may also be eligible for valuable tax credits.  Read more about filing requirements.

2. Determine if you can be claimed as a dependent by your parents.

There is a reason almost all tax software asks if you can be claimed as a dependent early on.  It impacts your taxes in important ways, especially for students.  Generally, it determines who receives any education related tax benefits you may be eligible for.  If your parents can claim you as a dependent, then they receive the benefits.  Unfortunately, you only get these benefits if no one can claim you as a dependent on their return.

How do you know if someone else can claim you as a dependent?  Most full-time students can be claimed by their parents (or other relative).  The main reasons you can NOT be claimed are:

  • You are 24 years or older at the end of 2015 (or 19 or older if not a student), or
  • You provided more than half of your own financial support throughout the year. Scholarships and grants received by the student do NOT count as the student providing their own support.

That’s fair though, right?  If your parents are supporting you financially, they should get the write-offs from Uncle Sam.  At least that’s the way the IRS sees it.

If you like reading about taxes (ha!), we go deeper into dependents in this post.  But there’s no need, TaxAct will help you determine if you can claimed as a dependent in a matter of seconds.

 3. Tax Credits (American Opportunity Credit and the Lifetime Learning Credit)

You or your parents may be eligible for one of these two tax credits.  You may only claim one, however, not both.

If your parents claim you as a dependent, then they're eligible for one of these credits. If no one claims you as a dependent, then you maybe eligible for them.

The American Opportunity Credit (formerly The Hope Credit)

This the more valuable of the two credits and should be claimed if possible.  To be eligible for it, you must be in the first four years of post-secondary school education (college, vocational school, etc.).  Students taking a “victory lap” aren’t eligible and should look at the Lifetime Learning Credit instead.  Here’s the rest of the 411:

  • You can claim up to $2,500 per eligible student, per year.
  • The credit covers 100% of the first $2,000 of qualified tuition, required fees, and qualified expenses, plus 25% of the next $2,000.
  • 40% of the credit is refundable, so you may receive $1,000 per eligible student as a tax refund even if you owe no tax.
  • Each student for which you claim the credit must have been enrolled at least half time for at least one academic period which began during the tax year.
  • Qualified expenses include tuition and required fees, books, supplies, equipment, and other required course materials (but not room and board).
  • If your (or your parents) income exceeds $80,000 ($160,000 if married filing jointly), the credit will be gradually reduced. Income has to be under $90,000 ($180,000 if married filing jointly) to receive a credit.
  • Students with a felony drug conviction are not eligible for this credit.

Lifetime Learning Credit

If you do not qualify for the American Opportunity Credit, you may still be able to claim the Lifetime Learning Credit.  Deets:

  • It applies to undergraduate, graduate, and professional degree courses, and even to post-graduate courses that help improve your job skills.
  • The credit is available for any and all years of post-secondary education, and also for adult and continuing education courses. There is no limit on how many years you can claim the credit.
  • There is no minimum enrollment requirement.
  • The amount of your credit will be 20% of the first $10,000 of combined post-secondary tuition and fees you paid, totaling no more than $2,000 (per year, not per student).
  • Qualified expenses include tuition, fees, books, supplies, equipment, and other course materials as long as they are required (room and board is not included).
  • The Lifetime Learning Credit is not refundable, so it will not be paid to you in a refund--it simply decreases your tax liability.
  • For 2015, the limit on modified adjusted gross income is $62,000 ($124,000 if married filing jointly).

4. Form 1098-T, Tuition Statement

Form 1098-T is the tax form your school will send you that documents the qualified tuition and other expenses you paid during the year.  The data from this form will help us determine if you (or your parents) are eligible for the American Opportunity Credit or Lifetime Learning Credit.

It's also used to determine if you or your parents qualify for the Tuition and Fees Deduction, an "above the line" deduction (meaning you don’t have to itemize to claim it) worth up to $4,000.

5. Scholarships and Grants

Generally speaking, scholarships, fellowships, and Pell grants are considered tax-free benefits if you received them while enrolled at an eligible institution. For tax purposes, federal assistance or Pell Grants are considered scholarships.  They are tax-free to you if:

  • You attend an accredited educational institution
  • You are pursuing a degree at a college or university
  • You use the scholarship, grant, or fellowship to pay qualified education expenses (such as tuition, fees, books, supplies, and equipment required for courses at the educational institution)

Assuming it’s tax-free, you do not need to report it on your tax return.

6. Tax-free Savings Accounts

There are two tax-free savings plans available to students and to those paying for someone's education. One of the savings plans is a state-sponsored account, the other is a special account sponsored by a bank or other financial institution. Both plans allow you to save money for college expenses and to withdraw the funds tax-free.

Qualified Tuition Programs (QTPs) - 529 College Savings Plans

A Qualified Tuition Program, or "529 Plan,” is a special state-sponsored savings account set up to pre-pay for college expenses. The owner of the 529 account can make contributions which may be withdrawn by the beneficiary when they attend college (or other eligible educational institution). The money in the account may be withdrawn tax-free if the funds are used for qualified education expenses at an eligible college, university, or other institute of higher learning.

529 Plans have no age or income restrictions for contributions or withdrawals, and the only limit on contribution amounts is that the total contributions may not be greater than the amount needed to pay the beneficiary's qualified education expenses.

The following expenses are qualified uses of funds from a 529 Plan:

  • Tuition
  • Books
  • Supplies required for class attendance
  • Computer (if required for class attendance)
  • Internet access (if not provided by the school, and if required for class attendance)
  • Room and board (if the student is enrolled at least half-time)
  • Special needs services

Coverdell Educational Savings Accounts - Coverdell ESAs

A Coverdell ESA is a savings account, sponsored by a bank or other financial institution, set up to pre-pay for K-12, college tuition, and other education expenses.

The savings account's beneficiary must be at least age 18 (or is a special needs beneficiary) to withdraw Coverdell funds, and must withdraw the funds before age 30 or the funds will be distributed and taxed. If the age requirements are met, the funds may be withdrawn tax-free if they are used to pay qualified education expenses. If the beneficiary turns age 30 before withdrawing the funds, they may avoid taxation by transferring the account to another qualifying relative or by rolling the ESA into a 529 Plan.

Coverdell ESAs have certain restrictions that 529 Plans do not:

  • Funds must be withdrawn or transferred after the beneficiary is age 18, but before age 30
  • Qualified expenses do not include computers or internet access
  • You may not contribute if your income is more than $110,000 ($220,000 if married filing jointly)
  • There is a maximum annual contribution of $2,000 per beneficiary (not per account and not per contributor)

The following expenses are qualified uses of funds from a Coverdell ESA (note that a computer and internet access are not covered):

  • Tuition
  • Books
  • Supplies required for class attendance
  • Room and Board (if the student is enrolled at least half-time)
  • Special needs services

7. Student Loan Interest Deduction

Once you graduate (or not) and start to pay back your student loans, you may be able to reduce your taxable income by up to $2,500 of the student loan interest paid.   Here’s the scoop:

  • Your lender should send you form 1098-E, which reports the interest you paid
  • If your parents claim you as a dependent, then they're eligible for this deduction. If no one claims you as a dependent, then you maybe eligible for it.
  • To be eligible, the loan must have been taken out solely to pay qualified education expenses.
  • Generally, the person whose name is on the loan gets to deduct the student loan interest. This person is legally obligated to make the interest payments on the loan.
  • It can be taken even if you do not itemize deductions.
  • The student must be you, your spouse, or your dependent.
  • The student must have been enrolled at least half-time in a degree program
  • As with the credits, there are income limits. The deduction is reduced if your modified adjusted income (MAGI) is greater than $65,000 ($130,000 if married filing jointly) and you’re ineligible if you’re income is $80,000 or more ($160,000 if married filing jointly).

Hopefully you found this information helpful.  Don’t worry, there won’t be a test.  In fact, you don’t really need to know this stuff, because we do.  TaxAct takes care of all of this for you – they ask you simple questions and take care of all the tax complexity automatically.  

 

This article also answers the following questions:

10 98 t tax form 1098 tax form 2500 student tax credit can a college student file taxes can college students file taxes can i claim my student loans on my taxes can i claim student loans on my taxes can i file taxes as a student can international students file taxes can students file taxes can you claim student loan interest on taxes can you claim student loans on taxes can you claim student loans on your taxes can you deduct college tuition can you deduct student loan interest can you get a tax return with no income can you write off student loan payments claim college student on taxes claim student loan interest claim student loans on taxes claiming student loan interest claiming student loans on taxes college and taxes college student and taxes college student file tax return college student file taxes college student filing taxes college student income tax college student income tax return college student tax college student tax credit college student tax deductions college student tax deductions for parents college student tax form college student tax refund college student tax return college student tax return questions college student tax write offs college student taxes college students and taxes college students filing taxes college students tax returns college students taxes college tax college tax deductions college tax form 1098 college tax form 1098 t college tax form for students college tax refund college tax return college tax write offs college taxes college tuition tax form do college students get a tax credit do college students have to file taxes do college students need to file taxes do college students pay taxes do full time students pay tax do full time students pay taxes do students file tax returns do students file taxes do students get tax breaks do students get tax refunds do students get tax returns do students have to file taxes do students need to file taxes do students pay taxes educational tax benefits educational tax credits educational tax deductions federal student aid tax forms federal student tax credit file taxes as a student filing student taxes filing taxes as a college student filing taxes as a student filing taxes as student filing taxes college student filing taxes for college student filing taxes for college students filing taxes for students filing taxes student filing taxes student loans filing taxes tips filing taxes with student loans financial aid tax return form for taxes free student tax filing free tax filing for college students free tax filing for students free tax preparation and filing free tax preparation for students free tax returns for students free taxes for college students free taxes for students full time student filing taxes full time student for tax purposes full time student tax full time student tax credit full time student tax refund full time student tax return full time student taxes full time students and taxes ge taxes grad student taxes graduate student tax credit graduate student tax refund graduate student taxes guide to taxes how to claim student loans on taxes how to file student loans on taxes how to file student taxes how to file taxes as a college student how to file taxes as a student how to file taxes college student how to file taxes for college students income limit for student loan interest deduction income tax for students irs student tax credit opt students tax should a college student file taxes should college students file taxes should i file taxes as a student student and taxes student credit for taxes student deductions for taxes student exemption from taxes student federal tax return student file taxes student filing tax return student filing taxes student form for taxes student free tax filing student income tax student income tax calculator student income tax credit student income tax exemption student income tax form student income tax return student loan and tax refund student loan interest and taxes student loan interest deduction limit student loan interest for taxes student loan interest on taxes student loan interest tax student loan interest tax credit student loan interest tax form student loan interest taxes student loan tax deduction student loan tax deduction calculator student loan tax deduction form student loan tax deductions student loan tax form student loan tax forms student loan tax refund student loans and tax refunds student loans tax form student loans tax refund student no income tax return student non tax filer statement student tax student tax benefits student tax calculator student tax credit student tax credit calculator student tax credits student tax deduction student tax deductions student tax exempt student tax exemption student tax exemption form student tax exemptions student tax filing student tax form student tax form 1098 student tax form 1098 t student tax forms student tax information student tax rate student tax rebate student tax refund student tax refund calculator student tax refund form student tax refunds student tax return student tax return calculator student tax return form student tax returns student tax tips student tax write offs student taxes student tuition tax credit student tuition tax form students and taxes students exempt from taxes students file taxes students filing taxes students filing taxes 2013 students income tax students tax students tax credits students tax form students tax refund students tax return students taxes t 1098 student tax form tax college tax credit for student loan interest tax credit for students tax credits for students tax deduction for college tuition tax deduction for student loan tax deduction for students tax deduction student loan tax deduction tips tax deductions for college tax deductions for college expenses tax deductions for college students tax deductions for college students 2013 tax deductions for college tuition tax deductions for education tax deductions for students tax exemptions for students tax filing for students tax for college students tax for students tax form 1098-t tax form for college students tax form for college tuition paid tax form for student loans tax form for students tax forms for college students tax forms for students tax information for students tax refund for college students tax refund for students tax refund student tax refunds for students tax return college student tax return college tuition tax return efile tax return for college students tax return for international student tax return for international students tax return for students tax return student tax returns for students tax schools tax student tax student loan interest tax tips for college students tax tips for students tax write offs for college students tax write offs for students taxes and college taxes and college students taxes and college tuition taxes and student loan interest taxes as a student taxes college taxes college student taxes education taxes for college students taxes for free online taxes for students taxes graduate student taxes school taxes student taxes student loan interest the tax college tips for filing taxes tips for taxes tips on filing taxes tuition statement tax form understanding taxes student what can college students claim on taxes what can students claim on tax what can students claim on taxes where to do taxes for free who can claim student loan interest

Do I Have To File Taxes?

Updated for Tax Year 2015 (for returns filed in 2016)

Do I have to file taxes? How much do you have to make to file taxes?  

Good question.  But there are actually 2 questions here, so let’s break them apart.

  1. Should I file a federal tax return?
  2. Am I required to file a federal tax return? (Do I need to file a tax return?)

 

1. Should I file a tax return?

The short answer – if you earned any income in 2015, you should file in 2016 even if you’re not required to.  Why?  To get a refund!  Most likely Uncle Sam withheld taxes from your paychecks.  Usually he takes too much.  File a return and get some of your money back!  You may also be eligible for tax credits, like the American Opportunity Credit, the Lifetime Learning Credit, and the Earned Income Credit (EIC).

I know, filing taxes can be a pain.  But TaxAct has drastically simplified tax preparation.  If it only takes a few minutes to get a few hundred bucks back, why not do it?  How else are you going to make that kind of money, that fast?

 

2. Am I required to file a tax return?

The details are below, but it’s even simpler for many young people.  If you can be claimed as a dependent by another taxpayer and are under age 65, you must file a tax return if you earned more than $6,300 in 2015. 

If you can't be claimed as a dependent, then you must file a return if your gross income meets a threshold based on your age and filing status.

 

Filing Status                                         Age on 12/31/2015                                  Gross Income

Single                                                              Under 65                                                         $10,300

                                                                            65 or older                                                     $11,850

 

Head of Household                                 Under 65                                                        $13,250

                                                                            65 or older                                                     $14,800

 

Married Filing Jointly                        Under 65 (both)                                              $20,600

                                                                         65 or older (one)                                            $21,850

                                                                         65 or older (both)                                          $23,000

 

This is taxes so of course there are some wonky rules and special exceptions.  If you want to get into the gory details, you can check out the IRS website.

All of this information applies to federal taxes, many states have slightly different rules.

 



This article also answers these questions:

age for filing taxes age to file taxes am i eligible to file taxes am i required to file a tax return am i required to file taxes amount of income to file taxes amount required to file taxes amount to file taxes amount you have to make to file taxes are you required to file taxes at what age can you file taxes at what age do you have to file taxes at what age do you not have to file taxes at what amount do i have to file taxes at what amount do you have to file taxes at what income do i have to file taxes at what income do you have to file taxes at what income do you need to file taxes can a dependent file a tax return can dependents file tax returns can i file my taxes can i file taxes cheap tax filing check your tax return do elderly have to file taxes do i file a tax return do i file taxes do i have file a tax return do i have to do my taxes do i have to file a federal return do i have to file a federal tax return do i have to file a return do i have to file a state tax return do i have to file a tax return do i have to file an income tax return do i have to file city taxes do i have to file federal income tax do i have to file federal tax return do i have to file federal taxes do i have to file for taxes do i have to file income tax do i have to file income tax return do i have to file income taxes do i have to file my taxes do i have to file state tax return do i have to file state taxes do i have to file tax do i have to file tax return do i have to file tax return if no income do i have to file tax returns do i have to file taxes do i have to file taxes every year do i have to file taxes on unemployment do i need to file a federal tax return do i need to file a tax return 2012 do i need to file an income tax return do i need to file federal tax return do i need to file federal taxes do i need to file for taxes do i need to file income tax do i need to file income tax return do i need to file income taxes do i need to file my taxes do i need to file tax do i need to file tax return do i need to file taxes do minors have to file tax returns do minors have to file taxes do retirees have to file taxes do senior citizens have to file taxes do seniors have to file taxes do students have to file taxes do you have to do your taxes do you have to file a state tax return do you have to file a tax return do you have to file an income tax return do you have to file federal taxes do you have to file for taxes do you have to file income tax do you have to file income taxes do you have to file state taxes do you have to file tax return do you have to file tax returns do you have to file taxes do you have to file taxes every year do you have to file taxes on social security do you have to file taxes on unemployment do you have to file your taxes do you have to have a job to file taxes do you need to file a federal income tax return do you need to file a tax return do you need to file taxes do your taxes does everyone have to file a federal tax return does everyone have to file a tax return does everyone have to file taxes does everyone need to file a tax return does everyone need to file taxes federal filing requirements federal income tax filing federal income tax filing requirements federal income tax filing threshold federal tax filing requirements federal tax questions federal tax return information federal taxes 2014 file a federal tax return file federal income tax file federal tax file federal tax return file for tax file for taxes file income tax file income taxes file maryland taxes file my federal taxes file my own taxes file my tax file my tax return file my taxes file tax file the tax file your own taxes filing a federal tax return filing federal income tax filing federal tax return filing for taxes filing income tax filing income taxes filing my taxes filing own taxes filing taxes by mail filing taxes on your own filing taxes questions filing taxes requirements filing taxes tips filing taxes what do i need filing your own taxes have to file taxes how do i have to make to file taxes how do i know if i have to file taxes how do i know if i need to file taxes how do i know if i should file taxes how do you have to make to file taxes how do you know if you have to file taxes how do you know if you need to file taxes how file taxes how much can i make and not file taxes how much can you make and not file taxes how much can you make to not file taxes how much can you make without having to file taxes how much do have to make to file taxes how much do i have make to file taxes how much do i have to earn to file taxes how much do i have to make to file taxes how much do i need to make to file taxes how much do u have to make to file taxes how much do you have make to file taxes how much do you have to earn to file taxes how much do you have to make file taxes how much do you have to make to do taxes how much do you have to make to file taxes how much do you make to file taxes how much do you make to have to file taxes how much do you need to file taxes how much do you need to make to file taxes how much have to make to file taxes how much i have to make to file taxes how much income do i need to file taxes how much income do you need to file taxes how much income is required to file taxes how much income required to file tax return how much income to file tax return how much income to file taxes how much income to have to file taxes how much money can you make and not file taxes how much money do have to make to file taxes how much money do i have make to file taxes how much money do you have make to file taxes how much money do you need to file taxes how much money you have to make to file taxes how much tax return how much to do taxes how much to file taxes how much to i have to make to file taxes how much to you have to make to file taxes how much you have to make to file taxes how old do you have to be to file taxes how to do a tax return how to do income tax return how to do own taxes how to do tax how to do tax return how to do tax returns how to do taxes how to do taxes on your own how to do your tax return how to do your taxes how to efile how to file a federal tax return how to file a tax how to file federal tax return how to file federal taxes how to file for taxes how to file income tax how to file income taxes how to file my tax return how to file my taxes how to file tax how to file taxes how to file taxes jointly how to file taxes on your own how to file your tax return how to file your taxes how to know if you have to file taxes how to know if you need to file taxes i need to file my taxes income amount required to file taxes income amount to file taxes income for filing taxes income required to file tax return income required to file taxes income requirements for filing taxes income requirements to file taxes income tax filing requirements income threshold for filing taxes income to file taxes irs do i have to file irs do i have to file a tax return irs do i have to file taxes irs do i need to file irs do i need to file a tax return irs do i need to file taxes irs tax filing requirements irs tax return information is there a minimum amount to file taxes minimum amount required for filing a tax return minimum amount to have to file taxes minimum for filing taxes minimum income to file a tax return minimum income to file taxes minimum to file taxes minimum to file tax return minimum you have to make to file taxes must i file a tax return need to file my taxes need to file taxes not filing a tax return not filing tax return not filing tax returns not filing taxes not required to file tax return not required to file taxes questions about filing taxes questions about taxes required to file a tax return required to file tax return required to file taxes requirements for filing a tax return requirements for filing taxes requirements for filing taxes 2013 requirements to file a tax return requirements to file federal tax return requirements to file tax return requirements to file taxes rules for filing taxes should i file a tax return should i file for taxes should i file my taxes should i file tax return should i file taxes should i file taxes jointly tax filing requirements tax filing threshold tax refund 2014 tax refund for 2014 tax refund information tax refund questions tax return filing requirements taxes information threshold for filing taxes threshold for filing taxes 2013 threshold to file taxes tips for filing taxes under what amount do you not have to file taxes what age can you file taxes what age do you have to file a tax return what age do you have to file taxes what age do you not have to file taxes what amount do i have to file for taxes what amount do i have to make to file taxes what amount do you have to file taxes what amount do you have to make to file taxes what amount do you not have to file taxes what amount of income do you have to file taxes what are the requirements for filing taxes what are the requirements to file taxes what can i file on my tax return what do i file for taxes what do i have to make to file taxes what do i need for filing taxes what do i need for taxes what do i need to do taxes what do i need to file my taxes what do i need to file tax return what do i need to file taxes what do you need for filing taxes what do you need to do taxes what do you need to file tax return what do you need to file taxes what does your income have to be to file taxes what i need to file my taxes what i need to file taxes what income do you have to file taxes what income do you need to file taxes what info do i need to file taxes what information do i need to file my taxes what information do you need to file taxes what is the amount that you have to file taxes what is the amount you have to file taxes on what is the income threshold to file a tax return what is the minimum income to file a tax return what tax return do i file what you need to file taxes what you need to file your taxes when am i required to file taxes when are you not required to file a tax return when are you required to file a tax return when are you required to file taxes when can you file for income tax when can you file income tax when can you file tax returns when can you file your income tax when can you file your tax return when do have to file a tax return when do i have to file a tax return when do i have to file my tax return when do i have to file my taxes when do i have to file my taxes by when do i have to file tax return when do i have to file taxes when do i need to file a tax return when do i need to file my taxes when do i need to file taxes when do i not have to file a tax return when do i not have to file taxes when do i not need to file a tax return when do taxes have to be filed when do u have to file taxes when do we have to file taxes when do you have to do taxes when do you have to file a federal tax return when do you have to file a tax return when do you have to file federal taxes when do you have to file for taxes when do you have to file income tax when do you have to file income taxes when do you have to file tax return when do you have to file taxes when do you have to file your taxes when do you have to file your taxes by when do you need to file a tax return when do you need to file taxes when do you not have to file a tax return when do you not have to file income tax when do you not have to file taxes when do you not need to file a tax return when do you not need to file taxes when file taxes when filing taxes when filing taxes what do i need when i can file my taxes when i file my tax return when must i file taxes when must you file a tax return when must you file taxes when not to file taxes when should i file tax return when should i file taxes when should you file taxes when should you file your taxes when to do taxes when to do your taxes when to file federal tax return when to file for taxes when to file income tax return when to file tax when to file taxes when you have to file taxes where do i file my federal taxes where do you mail your federal tax return where to do your taxes where to file my federal tax return who can file income taxes who does not have to file a tax return who does not have to file federal income tax who does not have to file federal income taxes who does not have to file federal tax return who does not have to file income tax who does not have to file income tax return who does not have to file taxes who does not need to file a tax return who does not need to file taxes who does taxes who file taxes who files taxes who is required to file taxes who must file a tax return who must file income tax who must file taxes who needs to file a tax return who needs to file taxes who should file taxes who has to file a federal tax return who has to file an income tax return who has to file federal income tax who has to file federal tax returns who has to file federal taxes who has to file income tax who has to file income tax return who has to file income taxes who has to file taxes who has to file a federal tax return who has to file a tax return who has to file income tax who has to file taxes who have to file income tax return who is not required to file a tax return who is not required to file taxes who is required to file a federal tax return who is required to file a tax return who is required to file tax return who is required to file taxes who must file a federal income tax return who must file a federal tax return who must file a tax return who must file an income tax return who must file federal income tax who must file federal tax return who must file federal taxes who must file income tax who must file tax return who must file taxes who needs to file taxes who should file a tax return who should file income tax return who should file tax who should file tax return who should file tax returns who should file taxes who to file taxes with why do i have to file taxes why do you file taxes why file taxes

Tax Dependent Explained

Updated for Tax Year 2015 (for returns filed in 2016)

Can you be claimed as a dependent on someone else’s tax return?  Can you claim your child or relative as a dependent on your taxes?  Answering these questions correctly is required to do your taxes and maximize your refund.  It determines who can claim an exemption on their taxes, which reduces one’s taxable income by $4,000 for each dependent in tax year 2015 (up from $3,950 in 2014).  Tax dependent rules also apply to other benefits, such as tax credits like the American Opportunity Credit, the Lifetime Learning Credit, and the Earned Income Credit.

 

Can someone else claim me as a dependent on their tax return?

The short answer is that a relative (often your parent) can claim you as a dependent if:

  • You were under age 19, or 24 if you're a full-time student, at the end of 2015, and
  • They provided over half of your living expenses, and
  • You lived with them over half the year. If you're a student who is "living" near campus for school, the IRS usually counts this as living with your parents and they can still claim you as a dependent.

Some other obscure rules apply, too.  If you’re masochistic you can read IRS Publication 501 for the full scoop.

Here are some common examples to help you decide:

  • You are a 20 year old full-time college student. You live on or near your college campus during the fall and spring semesters and with your parents during the summer.  You work some throughout the year, but your parents provide more than half of your total financial support, including school expenses like tuition, fees, room and board.  Your parents can claim you as a dependent.
  • You are a 22 year old college student (full or part time). You receive minimal to no financial support from your parents and work to put yourself through school and pay for your apartment. Your parents can NOT claim you as a dependent. 
  • You are 23. You just graduated college and got your first full-time job. Your parents can NOT claim you as a dependent. 
  • You are an 18 year old high school senior. You work part time through the year and live with your parents.  Your parents can claim you as a dependent.

If your parent can claim you, then they get a $4,000 dependent exemption on their taxes.  If no one can claim you as a dependent, then you get a $4,000 personal exemption on your taxes.

 

Can I claim someone else as a dependent on my taxes?

Again, the IRS rules for qualifying dependents cover every crazy situation you can think of, from housekeepers to emancipated offspring.  Thankfully, most of us live simpler lives. These basic rules will cover almost everyone.

There are two types of dependents, each subject to different rules:

  • A qualifying child
  • A qualifying relative

For both types of dependents, you’ll need to answer the following questions to determine if you can claim them.

  • Are they a citizen or resident? The person must be a U.S. citizen, a U.S. national, a U.S. resident, or a resident of Canada or Mexico.
  • Are you the only person claiming them as a dependent? You can’t claim someone who takes a personal exemption for himself or claims another dependent on his own tax return.
  • Are they filing a joint return? You cannot claim someone who is married and files a joint tax return. Say you support your married teenaged son: If he files a joint return with his spouse, you can’t claim him as a dependent.

 

Qualifying Child

In addition to the qualifications above, to claim an exemption for your child, you must be able to answer "yes" to all of the following questions.

  • Are they related to you? The child can be your son, daughter, stepchild, eligible foster child, brother, sister, half brother, half sister, stepbrother, stepsister, adopted child or an offspring of any of them.
  • Do they meet the age requirement? Your child must be under age 19 or, if a full-time student, under age 24. There is no age limit if your child is permanently and totally disabled.
  • Do they live with you? Your child must live with you for more than half the year, but several exceptions apply.
  • Do you financially support them? Your child may have a job, but that job cannot provide more than half of her support.
  • Are you the only person claiming them? This requirement commonly applies to children of divorced parents. Here you must use the “tie breaker rules,” which are found in IRS Publication 501. These rules establish income, parentage and residency requirements for claiming a child.

 

Qualifying Relative

Many people provide support to their parents. But just because you mail your mother a check every once in a while doesn’t mean you can claim her as a dependent. Here is a checklist for determining whether your mom (or other relative) qualifies.

  • Do they live with you? Your relative must live at your residence all year or be on the list of “relatives who do not live with you” in Publication 501.
  • Do they make less than $4,000? Your relative cannot have a gross income of more than $4,000 and be claimed by you as a dependent.
  • Do you financially support them? You must provide more than half of your relative’s total support each year.
  • Are you the only person claiming them? This means you can’t claim the same person twice, once as a qualifying relative and again as a qualifying child. It also means you can’t claim a relative—say a cousin—if someone else, such as his parents, also claim him.

You can claim a $4,000 (in Tax Year 2015, up from $3,950 in 2014) exemption for each qualifying dependent.

 

This sounds complicated, but don't sweat it.  TaxAct asks you all the right questions so you don't have to read IRS publications. You simply answer a few questions and they do the work to file your taxes accurately and maximize your refund.  

 



This article also answers these questions:

age for claiming dependents age limit to claim dependent on taxes age of dependents for taxes can a dependent claim a dependent can a dependent file a tax return can a dependent file taxes can a dependent get a tax refund can a foster child be claimed as a dependent can a parent be claimed as a dependent can both parents claim a child as a dependent can dependents file tax returns can dependents file taxes can i be claimed as a dependent can i claim a foster child as a dependent can i claim child as dependent can i claim my 18 year old as a dependent can i claim my 19 year old as a dependent can i claim my boyfriend as a dependent can i claim my child as a dependent can i claim my college student as a dependent can i claim my daughter as a dependent can i claim my foster child as a dependent can i claim my girlfriend as a dependent can i claim my mom as a dependent can i claim my mother as a dependent can i claim my parent as a dependent can i claim my parents as dependents can i claim my son as a dependent can i claim my spouse as a dependent can i claim my wife as a dependent can i claim myself as a dependent can i claim parents as dependents can i claim someone as a dependent can i file taxes as a dependent can my boyfriend claim me as a dependent can my husband claim me as a dependent can parents be dependents can someone claim you as a dependent can you claim a disabled person on your taxes can you claim a spouse as a dependent can you claim spouse as dependent can you claim your child as a dependent can you claim your child if you pay child support can you claim your parents as dependents can you claim your spouse as a dependent can you claim yourself as a dependent can you claim yourself as a dependent on your taxes can you claim yourself on taxes can you file child support on your taxes can you file taxes as a dependent can you file taxes if someone claimed your dependent can you file taxes if you are a dependent child and dependent care expenses child dependent tax credit child tax child tax exemption child tax return claim a dependent claim as a dependent claim dependent claim dependent irs claim dependent on taxes claim dependent rules claim dependents claim dependents on taxes claim someone as a dependent claim taxes claimed as a dependent by someone else claimed as dependent claiming a child as a dependent claiming a college student as a dependent claiming a dependent claiming a dependent child claiming a dependent on taxes claiming a dependent that is not your child claiming as a dependent claiming as dependent claiming child on taxes claiming children on taxes claiming dependent claiming dependent on taxes claiming dependents claiming dependents irs claiming dependents on paycheck claiming dependents on tax return claiming dependents on taxes claiming on taxes claiming parents as dependents claiming people on your taxes claiming someone as a dependent claiming someone on your taxes claiming tax dependents claiming taxes co dependents credit for child and dependent care expenses dependant tax deduction dependants dependency allowance dependency exemption dependent dependent care expenses dependent care tax credit dependent claim dependent credit dependent deduction dependent exemption dependent file tax return dependent file taxes dependent filing tax return dependent for tax dependent for tax purposes dependent for taxes dependent income dependent irs dependent on tax dependent on tax return dependent on taxes dependent on taxes rules dependent tax dependent tax credit dependent tax deduction dependent tax exemption dependent tax filing dependent tax form dependent tax refund dependent tax return dependent tax rules dependent taxes dependent taxes rules dependents dependents and taxes dependents claimed on taxes dependents definition dependents filing taxes dependents for tax purposes dependents for taxes dependents irs dependents on tax return dependents on taxes dependents tax dependents tax deduction dependents tax return dependents taxes do dependents file taxes do dependents have to file taxes do you claim yourself as a dependent earned income credit qualifying child eligible dependents for taxes exemption for dependents file taxes as dependent filing a dependent on taxes filing as a dependent filing dependents filing dependents on taxes filing taxes as a dependent filing taxes as dependent filing taxes claiming dependents filing taxes dependent filing taxes for dependent children filing taxes with dependents how many children can you claim on taxes how many dependents can i claim on taxes how many dependents can you claim on your taxes how old can a dependent be on taxes how to claim a dependent how to claim a dependent on taxes how to claim dependents how to claim dependents on taxes how to claim someone as a dependent how to claim someone on taxes how to claim someone on your taxes how to claim your child on taxes how to file dependent tax return how to file taxes as a dependent if my parents claim me as a dependent income tax dependent income tax dependent deduction income tax dependents irs claim dependent rules irs claiming a dependent irs claiming dependents irs definition of dependent irs dependent irs dependent definition irs dependents irs dependents rules irs qualifying dependent irs refund news irs refund return irs refund where is it irs rules for claiming a dependent irs rules for claiming a dependent child irs rules for claiming dependents irs rules for dependents irs rules on dependents irs tax dependent irs tax dependent rules irs what is a dependent irs who can i claim as a dependent married filing separately dependents no dependents taxes number of dependants number of dependents qualifications for claiming a dependent qualifying child for earned income credit qualifying child irs qualifying child rules qualifying dependent qualifying dependent irs qualifying dependents qualifying dependents on taxes qualifying for earned income credit qualifying relative dependent requirements for claiming a dependent on taxes rules for claiming a child as a dependent rules for claiming a dependent rules for claiming a dependent on your tax return rules for claiming dependents rules for dependents rules for dependents irs rules on claiming a dependent rules on claiming dependents rules to claim a dependent tax claim dependent tax claiming dependents tax credit for dependents tax dependent tax dependent age tax dependent age limit tax dependent calculator tax dependent deduction tax dependent exemption tax dependent form tax dependent parent tax dependent qualifications tax dependent requirements tax dependent rules tax dependents tax exemption for child tax for dependents tax form dependent tax form for claiming dependents tax form for dependents tax form to claim dependents tax refund for child tax refund for dependents tax refund questions tax refund when tax return dependent tax return dependent child tax return dependent rules tax return dependents tax return for child tax return for dependents tax rules for claiming dependents tax rules for dependents taxes and dependents taxes claiming dependents taxes dependent taxes dependent age limit taxes dependent rules taxes dependents taxes for dependents taxes what is a dependent what are dependents on taxes what are tax dependents what is a dependent for taxes what is a dependent in taxes what is a dependent on a tax form what is a dependent on taxes what is a dependent taxes what is the age limit for a dependent on taxes what is the age limit for dependents on taxes what qualifies as a dependent for taxes what qualifies as a dependent on taxes what qualifies someone as a dependent what qualifies you as a dependent when can you claim a dependent when can you claim someone as a dependent when claiming dependents on taxes who are dependents on taxes who can be a dependent on taxes who can be claimed as a dependent on tax return who can be claimed as a dependent on tax returns who can be claimed as a dependent on taxes who can be claimed as dependent who can be claimed as dependent on taxes who can claim a child as a dependent who can claim a child on taxes who can claim a dependent who can claim dependent who can claim dependents who can claim dependents on taxes who can claim you as a dependent who can i claim as a dependent on my taxes who can i claim as dependent who can i claim on my taxes who can you claim as a dependent on taxes who can you claim as a dependent on your taxes who can you claim as dependent who can you claim as dependent on taxes who can you claim on taxes who can you claim on your income tax who can you claim on your tax return who can you claim on your taxes who can you claim on your taxes as a dependent who is a dependent on taxes who qualifies as a dependent who qualifies as a dependent on tax return who qualifies as dependent who qualifies as dependent on tax return who you can claim as a dependent


Income Tax Basics

Looking to learn the income tax basics? First off, let’s get a few things straight. Yes, taxes kinda suck. Yes, the 16th Amendment, which ushered in the federal income tax in 1913, is a little shady. And yes, most people have no idea where their taxes actually go each year. Despite these things, everyone should know the basics about taxes because, like it or not, we gotta pay ‘em.  

The infamous income tax

As its name suggests, these are taxes you pay on the money you earn. This could include money you earn at your job, interest you earn from a savings or checking account (like anyone’s earning interest these days), retirement income, and a bunch of other sources of cash I won’t go into. In the U.S. we have what’s called a progressive tax system, which means that your tax rate goes up as you earn more money. There are ways to reduce your taxes, and I’ll get to those in a minute. Suffice it to say, if you’re getting paid, Uncle Sam wants a cut. And maybe that’s not such a bad thing. Like when your taxes are used to maintain our Interstate highways, run the National Park system, and pay our hard-working servicemen and women (albeit, not enough).

 

Paying your taxes

Uncle Sam’s gonna get his cut, one way or another. The simplest (and most common) way to pay your taxes is through your paycheck. Each time you get paid, your employer withholds federal and state taxes and forwards the money to the government. At tax time, when you get your W-2 (or 1099s if you’re self-employed, a contractor, etc.) and fill out your forms, you either get a refund or owe more. If you get a refund, it means you overpaid on your taxes throughout the year, effectively giving the IRS an interest-free loan with your hard-earned dollar. Not the best thing in the world I suppose, but at least you get a fat check that you weren’t expecting. On the other hand, if you owe money at tax time, it means you didn’t throw in enough cash and now it’s time to pay up.

 

Cutting your tax bill

As I said earlier, each of us pays a certain tax rate, based on how much money we earn. Whether you’re single or married also affects your tax rate. Despite your tax rate, there are lots of things that can cut your tax bill, such as deductions, exemptions, and credits. Deductions basically reduce the amount of tax you are responsible to pay. The Standard Deduction, for example, for a single (unmarried) taxpayer is $6,100. Similarly, the personal exemption is worth $3,900 to a single taxpayer. Credits also lower your taxes, and can even give you money back in the form of a refund. The Earned Income tax Credit (EITC) is a good one. If you make less than $51,567 you probably qualify.

 

Doing your taxes

You’ve got some options when it comes to actually doing your taxes.

 

Pen and paper

The old-skool way to do your taxes is with standard pen and paper. It takes a while and a little math, but you can’t beat the price (it’s free). Grab your tax forms online from the IRS, or get them at your local post office or library.

 

Computer, tablet, or phone

If pen and paper aren’t your thing, there are lots of mobile, online, and software options. I’d be lying if I said I wasn’t biased to Common Form. It’s easy to use, inexpensive, and there are no hidden fees. There’s something to be said for honesty these days, and Common Form gets it. Still, there are others options out there—some quite good.

 

Tax service

Your other option is to hire a tax service or professional tax preparer to do the heavy lifting for you. It’s certainly less effort on your part, but you have to pay for it. Costs range from an average of $218 for a standard 1040, to $806 for an 1120 Tax Form.  Of course, the peace of mind you get by not having to worry about your taxes might be incentive enough to pay top dollar to have someone else do them. That’s up to you.

 

It's not too late to file your 2013 taxes!

Didn't file your 2013 taxes by April 15, 2014? No worries, we'll let you in on an industry secret – if you're getting a refund, you can file for up to 3 years with no late fees or penalties! If you owe, your penalties are racking up so file your return as soon as possible to stop the clock on them. Either way, it's not too late to file your 2013 taxes. Read more about your specific situation below.  

If you need to do your 2014 taxes (typically filed by April 15, 2015), click here to file your 2014 taxes with Common Form.

 

If you're getting a refund on your 2013 return:

  • You can file through April 15, 2017 (October 15, 2017 with an extension) with no late fees or penalties.
  • If you don't file by 2017, you forfeit your refund.
  • Common Form doesn't support prior year taxes, so we recommend our friends over at TaxAct if you still need to file your 2013 taxes.

 

If you owe additional 2013 taxes:

  • There is no penalty if you filed an extension and paid 90% or more of taxes owed by April 15, 2014 as long as you file your return by October 15, 2014.
  • A late filing penalty applies if you owe taxes and didn't file your return or an extension by April 15, 2014.
    • The late filing penalty is 5% of the additional taxes owed amount for every month (or fraction thereof) your return is late, up to a maximum of 25%.
    • The late filing penalty is 10 times higher than the late payment penalty. If you can't pay your tax bill and didn't file an extension, at least file your return as soon as possible! You can always amend it later.
  • A late payment penalty applies if you didn't pay 90% or more of taxes owed by April 15, 2014, whether you filed an extension or not.
    • The late payment penalty is 0.5% (1/2 of 1 percent) of the additional tax owed amount for every month (or fraction thereof) the owed tax remains unpaid, up to a maximum of 25%.

 

If you're not sure if you owe or are getting a refund in 2013: