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Ask the taxgirl: Claiming Independent When You’re Not

January 30, 2011 · 3 comments

Taxpayer asks:

I was in college until May, and have been supporting myself since. I just filed my taxes for free at turbotax.com, filed as an independent, and got the email that my return has been accepted. Then my parents told me that they claimed me as a dependent so that they could keep me on their health insurance. Can I undo my taxes?

taxgirl says:

Dear college students,

Please ask your parents what they plan on doing before you file your taxes.

Love,
taxgirl

I get a lot of variations on this question. So my first piece of advice, though it’s a bit late in your case, is to ask your parents what the plan is before you file your own return.

In your case, it’s already a done deal. It’s tough to tell who filed first from your facts but chances are that the IRS will bounce the second filed return. If that’s your return, that will work out well for you since the IRS will send a little note telling you that you someone else claimed you and you can simply agree that you’re a dependent. Since your return was accepted, though, I’m guessing that the order is reversed which means your parents’ return will be bounced. To fix that, you’ll need to amend your own tax return so that your parents can advise the IRS accordingly. What will most likely happen is that your parents will get a letter advising that they’re not allowed to claim you as a dependent because “someone else” claimed you (the letter won’t say that it was you because of privacy issues) and they’ll have to work it out with the IRS while you file your amended return.

Assuming that you and your parents agree that you’re the one who needs to change your return, you can amend your return by filing a federal form 1040X (downloads as a pdf). Read the instructions carefully but the part that applies to you is at Page 2, Exemptions. Keep in mind that you may now owe some tax (I’m not sure what your personal situation is).

As an aside, under the new health care law, your parents are allowed to keep you on their health care plan until you reach age 26 even if you are not claimed as a dependent on their tax return (read the rules here). If health insurance is the only reason that they are claiming you, they don’t have to do so. That said, if there are other reasons, the normal rules for claiming a dependent (regarding support, etc.) apply.

Like any good lawyer, I need to add a disclaimer: unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.

Have a question? Ask the taxgirl! – On twitter at http://www.twitter.com/taxgirl and on Facebook at http://www.facebook.com/taxgirl

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{ 2 comments… read them below or add one }

1 Mary Kay Foss January 31, 2011 at 2:09 pm

This happens to my clients at least once a year – one year it was three returns “bounced” because someone else claimed a dependent. Oddly, all of the college kids who filed their own returns were boys. I don’t know if that means that the girls ask their parents first or if they generally don’t work while attending college.

Keep spreading the word on this one.

2 Mike Emeigh February 2, 2011 at 1:47 pm

I also see several of these every year. I think that the reason it happens with boys more than girls is that the girls have better communications with their parents in general, although I probably shouldn’t make that generalization :)

I advise my clients with students who are about to enter college to have this discussion with their children before the kids go away. Most of the students don’t know any better, and there’s often no one on campus to help them understand what they are doing.

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