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Why do my taxes go WAY down if I say no to the question "Did you support yourself in 2019?"

Here's the question
Did you support yourself in 2019?
 
Supporting yourself means paying for more than half of your living expenses with earned income. Learn more
 
Yes, I paid for more than half of my living expenses with earned income.
No, I didn't pay for more than half of my living expenses with earned income.
 
 
In 2019, I was a full time college student for the whole year (aged 20-21) and my parents paid for my rent, car, and food.  I tried to start an affiliate marketing business that, to my surprise, turned out to actually be profitable.  However, I just saved all the money and did not use it to fund my living expenses.  
 
 The only honestly answer this question is "no."  However, if I say "yes" my taxes owed go up substantially.  Why is this?  Is there some sort of deduction if you do not support yourself?
 
At first I thought this was about the Kiddie Tax, but saying no would make your tax burden go up instead of down like it's doing for me.  And my income is earned from self-employment so that shouldn't matter.  My understanding is that the Kiddie tax asks about IF you make more than half your expenses and it doesn't matter who actually pays them while this question is about who actually pays them.  
 
So I guess I'm asking:
I am good to say no to this question regardless of how much money I made, right?
Why is my tax burden so much lower if I say no?  I would think it should be the opposite.  
 
Thank you.  
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2 Replies
Anonymous
Not applicable

Why do my taxes go WAY down if I say no to the question "Did you support yourself in 2019?"

are you looking at your refund or income taxes which would be the income tax on your taxable income + self-employment tax 

 

based on the info you supplied, the box can you be claimed as a dependent should be checked.   As a dependent, your standard deduction would be limited to your net earned income (wages and net schedule C income) +$350.   the maximum standard deduction is $12,200.  

 

there is an earned income credit that is not allowed if you can be claimed as a dependent.

 

so if you answer Yes, I paid for more than half of my living expenses with earned income, your standard deduction would be at the maximum and you would get the Earned Income Credit. lower net tax higher refund
if you answer No, I didn't pay for more than half of my living expenses with earned income, your standard deduction could be less than the maximum and no Earned Income Credit, higher taxes smaller refund.
 
if this is not what's happening, then likely there is something wrong.  We can't see your return so you may need to contact support

 

Why do my taxes go WAY down if I say no to the question "Did you support yourself in 2019?"

Hi,

I am looking at "FEDERAL TAX DUE" (I believe I was covered by a safe harbor rule allowing me to not pay quarterly taxes) which decreases substantially if I say "No, I didn't pay for half of my expenses with earned income"  I had more self-employment income than the standard deduction and it changes too much for the standard deduction to be the reason anyway. 

 

The only things I could think of why this makes my taxes go down is that it's either transferring tax burden to my parents (is that possible with earned income?) or there's some sort of student discount.  

 

Do I need to pay for TurboTax live to have someone look at this?  

 

Thank you.  

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