Newly married college student, does my spouse claim me as a dependent or do my parents if they pay for college tuition

[Anonymous]

I got married in July, my parents paid tuition (half of which was covered by scholarships) for me all year. I worked part time year-around to pay for some of my expenses, and my wife works full time and we have paid for all expenses since we got married besides tuition. My parents want to claim me as a dependent, but then we couldn't file as married joint filing. Which is the correct way to file? Combined income is ~40k a year, but about half of that since my wife didn't start working full time until August

[DoninGA · Accepted solution]

Assuming that you are under the age of 24 and were a full time student during at least 5 months of 2017, then your parents may be able to claim you as a dependent under the Qualifying Child rules.

If you are over the age of 23 at any time in 2017 and have gross income of $4,050 or more then no one can claim you as a dependent.

You can never claim a spouse as a dependent.  If you are legally married then you can only file your tax return as Married Filing Jointly or Married Filing Separately.

You can file as MFJ and your parents can claim you as a dependent on their tax return, IF when filing your tax return as MFJ you both are only filing for a tax refund of the taxes withheld from wages and/or the estimated taxes that were paid.  If your tax return has any type of credit such as Earned Income Tax Credit or an education credit like the American Opportunity Credit (AOC) or the Lifetime Learning Credit, then the parent cannot claim you as a dependent.

If that is the case and the parent can claim you as a dependent then you must file your tax return as Married Filing Separately.  When filing as MFS you lose some credits available and others are reduced.  The other spouse also has to file as MFS.  And you each can only use the standard deduction or you each must use itemized deduction on your separate tax returns.

See this TurboTax support FAQ for filing jointly versus separately - https://ttlc.intuit.com/questions/1894449-is-it-better-for-a-married-couple-to-file-jointly-or-separ...