@joshambuehl
If the student is required to file a tax return, then the student is required to file a tax return. Period. End of that story.
If the parents *QUALIFY* to claim the student as a dependent on the parents' tax return, then it flat out *does* *not* *matter* if the parents actually claim that student or not. The student doesn't have a choice and *must* select the option for "I can be claimed on someone else's tax return".
Please take note that for the student, the option is "I ****CAN*** be claimed..." Not, "I **WILL** be claimed"
The parents have the choice to claim the student or not. If the parents *QUALIFY* to claim the student, then the student does not have any choice on what the student is required to indicate on the student's tax return.
Here's some things that students and parents alike get confused on to, when trying to figure out the dependent stuff.
- There is no requirement for the parents to provide the student any support. Not One Single Penny. The support requirement is on the student, and *ONLY* the student. It reads:
If the student did not provide more than 50% of the student's own support, then the parents qualify to claim the student as a dependent on the parent's tax return. Scholarships, grants, 529 funds, gifts, etc. do not count for the student providing their own support"
- Take note of the word *QUALIFY*. In no way does it insinuate an absolute requirement to claim the child.
- There is no requirement for the parents to provide a single penny of support to the student.
- The student's earnings/income does not matter. The student could earn a million dollars and yet the parents' still qualify to claim them.
- There are only two possible ways the student can provide more than half of their own support.
1) The student had a job or was self-employed during the same tax year and earned sufficient monies to have provided more than half of their support.
2) The student was the ***PRIMARY*** borrower on a *qualified* student loan and sufficient funds were distributed to the student during the year to justify the student providing more than half of there support.
Now even with that, it's perfectly possible for the student to earn $500,000 in a tax year, yet still be unable to have provided more than half of their own support. So student earned/borrowed income alone won't do it.
If the student received $150,000 (my numbers are exaggerated to make the point here) in scholarships, grants, 529 distributions and other third party sources, that would mean the student would have to have more than $150,000 of income ithey earned in the tax year *AND* that it cost them more than $300,000 to support themselves for the tax year.
Now there is no way on this green earth that you will ever convince the IRS that it cost more than $300,000 to support an *undergraduate* student for a year, I don't care what college you go to including Yale, BYU, Harvard, etc. Support cost have to be "reasonable" and $300,000 which includes the tuition and other education cost is flat out *not* reasonable any way you look at it.
