Can I file as an independent?

[Anon29]

I know that my parents will try to claim me as their dependent, however I have not received any financial assistance from them nor stayed in their home at any point (aside from visiting on a holiday). For some context, I'm a full time college student who is funding their education fully with the military reserve, I've made great efforts to be financially independent as to not rely on others; I would like to be able to file as an independent as a result.

[Critter-3]

If they  claim you (after you have a discussion as to why they cannot) and your return is rejected  then your only option is to mail in a paper return to claim yourself.  They will/should amend their return however that is not your problem.  

[NCperson]

in order for your parents to claim you, there are a number of rules that must be satisifed...

I suggest clicking on the link below and answer the questions as if you were your parents.  it's the offical IRS website.  Your parents would need to satisfy the responses to these questions in order to  claim you legally  (or for you to prove that they can't under the circumstances). 

one of the critical questions is who is providing more than 50% of your support

note that the IRS does state that being away at college is considering 'temporarily away from home' so it could be that technically you do live with them permanenty for more than 6 months of the year, but depending on how the other questions are answered (e.g. who is paying more than 50% of your support)  it may be a moot point.   You may want to answer this question as "over 6 months at home" just to be conservative.

https://www.irs.gov/help/ita/whom-may-i-claim-as-a-dependent

at the end of the questions it will state whether the child is a dependent or not.  Remember you are answering the questions as if you were your parents. 

[bosso3]

@NCperson's response to this is very good.

The following info may also help:

The rules regarding who is a dependent are available

https://www.irs.gov/publications/p501#en_US_2021_publink[phone number removed]

At this site, on the left, click "Table 5. Overview of the Rules for Claiming a Dependent"

This explains whether or not your parents can claim you as a dependent.

I suggest you also refer to https://www.irs.gov/publications/p501#en_US_2021_publink[phone number removed]

which explains rules for claiming a dependent.

Click on the blue "Dependent" link on the left side of the screen.

Also consult https://apps.irs.gov/app/vita/content/globalmedia/overview_of_the_rules_for_claiming_4012.pdf

Lastly, I suggest talking with your parents to review whether or not they claimed you as a dependent and if appropriate, discussing why that may not be correct.  If they object to you claiming yourself as your own dependent, listen to their reasons.   You may want to suggest that they go through the IRS questions to get their own result.  Maybe you could go through the questionaire process together.  Be sure to ask how they will feel if you proceed to claim yourself as independent.   After this discussion, you have a choice to make.  Balance your current and future relationship with your parents with the financial impact of having the deduction for yourself.

Good luck.

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[NCperson]

while I appreciate the sensitivity of family relationships that @bosso3 raises, on the other hand 'the rules are the rules'.   If the parents can claim the student per the IRS rules, then that is the way it has to be (and vice versa). 

if the parent CAN claim the student, they have that right, period.  They don't have to as it their option.

However, the student doesn't the same option, if the rules indicate the parent CAN claim the student, then the student must check the "can be claimed box" , even if the parents decide not to claim the student. 

it is just the way it works.  

[Carl]

A few things to point out, that are not in the rules per-se. This pertains to the rule about support.

1) There is no requirement for the parents to provide the student any support. Not a single penny. The support requirement is on the student, and only the student. That requirement is:

If the student did not provide more than 50% of their own support for the entire tax year, then the parent's qualify to claim the student.

The key word here is *QUALIFY*. It does not matter if the parent's actually claim the student or not. If the parents "QUALIFY" to claim the student, then the student must select the option for "I Can be claimed on someone else's tax return".  The parents have a choice to claim the student, or not. The student does not have a choice.

2) Understand that all income from third party sources does not count for the student providing their own support. This includes, scholarships, grants, 529 distributions, gift from Aunt Mary, money from parents, etc. So there are only two possible ways the student can have any claim to providing more than 50% of their own support.

  a. - The student was self-employed or had a W-2 job and earned enough taxable income to justify a claim to providing more than half of their own support. Additionally, the income earned must be more than the total of all other third party income received during the tax year.

  b. - The student (not the parent) was the primary borrower on a qualified student loan, and sufficient funds were distributed to the student during the tax year to justify a claim of the student providing more than 50% of their own support for the entire tax year. Additionally, the funds distributed to the student during the tax year must exceed the total of all other third party income received by the student during the entire tax year.

A fair number of students are claiming themselves as independent so they can qualify for the stimulus payments. For those doing so that don't qualify, the IRS will most likely consider it fraud. So if you're going to claim you provided more than 50% of your own support as a college student for the entire tax year, be ready to prove it anywhere from 1-10 years down the road if (when?) you get audited on the matter.

Three key rules to keep in mind when dealing with the IRS.

1) You are guilty until proven innocent.

2) The burden of proof lies on the accused (that could be you!) and not the accuser.

3) If it's not in writing, then it did not occur.

[bosso3]

Both @Carl and @NCperson make good points.

Carl's points at the end of his note, #3, about keeping records, is a very good point, especially if you claim yourself, and your parents also claim you and they will not change their return.  That is likely to result in quick IRS inquiries.  I will point out that other factors besides documents are relevant, including testimony of you or your parents.

Carl is also correct with point #2, the burden of proof regarding what you file is on you (the preponderance of evidence, I think).

I would point out that Carl's reference to "fraud" strikes me as a bit extreme in this case.  In fraud cases, the burden of proof is on the IRS and that proof requires the IRS to show intent to evade paying a tax that is due.  If you take reasonable steps to ensure you are following the IRS rules, you are not guilty of fraud.  I suggest that you keep notes of your conversations with your parents, a printed copy of your results from  https://www.irs.gov/help/ita/whom-may-i-claim-as-a-dependent

  perhaps a printed copy of this discussion, and any other research results to support the fact that you took reasonable steps to determine the correct way to file your return.  Doing so would make the suggestion of fraud unlikely.   If you really want to protect yourself from the IRS, you could include a letter with your paper return stating you discussed this issue with your parents, but they would not change their return.

For more info about fraud see

https://www.irs.gov/pub/irs-tege/teb3_lesson5.pdf

and you can GOOGLE  irs proof of fraud

[Carl]

I would point out that Carl's reference to "fraud" strikes me as a bit extreme in this case.

I would tend to agree. But when you have a college student that claims to be independent more than one year, I would expect it to raise flags. Don't know that it would. But it certainly could. Especially if it was questioned before by the IRS and the response was what I would call "flakey" or "borderline acceptable".

Typically (as I understand it) when the IRS finds a problem tax return, or something they question or even just flat out don't agree with, it's of my impression that it's initially viewed as an oversight, misunderstanding of tax law, or honest mistake. About 99% of the time, that's exactly what it is.  It takes quite a bit for the IRS to see things from the fraud angle. For example, ignoring IRS notices - especially notices to respond, as well as not accepting certified mail from the IRS a sudden and substantial  jump in deductions with no offsetting increase in income, particularly in the charitable contributions arena, etc.  Not so much in the medical expenses category though. That's just a few of the most common things for your "typical" tax paying Citizen Joe.

[bosso3]

From my personal experience I agree with @Carl 's most recent comments about IRS and their reaction to errors as being oversight, misunderstanding of tax law, or honest mistake. 

[Mike9241]

if you pay over 50% of your support,  regardless of your age, they can not claim you as a dependent. 

[Hal_Al]

Are you asking about the 2021 or 2022 tax year. Except for the 2021 stimulus money ($1400), with the tax law change, effective 2018, most students will get the same refund whether they claim themselves or not. The personal exemption has been eliminated and the standard deduction increased. Even for 2021, the family still gets the $1400 stimulus, regardless of which way you file (it just goes to the parent, not the student). However, you only qualify for an education credit or deduction, on your return, if you are not a dependent.

But

There's a new urban myth among college students that says they can get a $1000 from the government just for filing a tax form. For most of them, they simply aren't eligible. A full time unmarried student, under age 24, even if you don't qualify as a dependent, is only eligible for the refundable portion of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans, Military education benefits, or student loans & grants. You usually must have actually paid tuition, not had it paid by GI Bill.  It is usually best if the parent claims that credit. 

You cannot claim a credit if you are, or can be, claimed as a dependent by someone else.

Reference: Line 7 instructions for form 8863. https://www.irs.gov/instructions/i8863