@gabrielelholmes wrote:
So what should I do if they accept the tax return? Will this cost my parents any money?
First of all, wait. The IRS does not open e-filing until at least January 27, although they may accept some unscheduled test returns earlier. If the IRS accepts your return and you did not check the box for "I can be claimed as a dependent by someone else" then this is what will happen.
1. Your parents will be blocked from e-filing if they claim you as a dependent. They should still claim you as a dependent, but they will have to print and mail their return. (They should not remove you and e-file, and then amend later. This causes more problems than it solves.)
2. You may receive up to $1800 in stimulus payments. This is tax fraud.
3. You can file an amended return, beginning in March, to change your answer on that box. If you received a stimulus rebate because you did not check the box, you will have to pay it back. If you amend before April 15, you won't owe interest or penalties on the repayment. But don't spend the stimulus payments when you get them!
3a. (Note, whether or not you amend, your parents will have to file by mail. The e-file block created by you filing first won't be removed this filing season even if you amend, the database is simply not very efficient.)
4. If you don't or can't amend your return, you and/or your parents will get a letter from the IRS in 6-9 months asking for clarification. If you explain that you are their dependent, they won't have to pay anything back, but you will have to repay the stimulus with interest and late fees.
If the IRS rejects your return for some reason, you can check that box when you go in to fix whatever else is wrong, and if you re-transmit a correct return and it is accepted, then all is well and you don't need to amend and your parents won't have any problems. (Remember that re-submitting a rejected return is not the same as amending. If your return is rejected, the IRS never sees it, so you are still submitting an original tax return. Amending means changing a return that has been accepted and processed.)
