So what do you think... be honest with me. This, incase you have been wondering is why I've not been around for awhile... been trying to work this out for a month or two. It's a shame that money does this to people.
This is from my personal little site... so if it seems strangly written, sorry.
Okay, so here it is.
I'll try to articulate this clearly and not be too long. For those of you who are burdened with paying a large sum of taxes this year, perhaps you can relate.
Appearantly I owe $1100 total (state/fed) which I plan to pay... of course. Problem is... there is a tax deduction for students for their first two years inwhich they can deduct 100% of tuition/books... etc, up to $2000. I was thrilled to hear about this, but here is the problem. In order to qualify for this deduction, you must claim yourself as independent on your taxes. Well, my parents claim me as a dependent, therefore, the government says that they qualify for this deduction for me. Therefore, the money that I paid to go to school ($2400 or so), they asked me if they could use for this deduction on their taxes. I agreed, natually. They said that if I let them use these reciepts, they will help me with my $1100, which was cool. Keep in mind, this is actually not right on their part. In order to claim me as a dependent, there is a 5 tier rule which must apply. 3 of them they are fine with, one of them they barely got me on, but the 5th one stated that they MUST supply over half of my expendentures, adding up to atleast half of my income. I made $16000 last year, therefore they would have had to of supplied atleast $8000 towards my expenditures. Yeah right, never happened. But I told them to do what will save us ALL the most money. They determined that it would save us ALL more money if they used the reciepts (big surprise, right?). Okay, there is a $2000 deduction that they benifitted from 100% (since it was MY money that paid for all of those reciepts), now add on the $1500 child tax credit... that is $3500 that they were able to deduct because of illegally claiming me as a dependent. I know what you are saying... you live at home and they don't charge you rent. Yeah, you're right, that's what the $1500 child tax credit is for, along with the maintanence (sp?) and all the other junk I do around the house (which is to be expected, of course... no problem with that). So the $1500 deduction is more than fair to them. So, since they got $2000 deducted from their taxes because of me, they said that they would help me pay for some of my taxes. So I call my mother today to find out how much they are going to help me... I expected around $800-$900, is this too high of an expectation? Well, she say's she'll give me $100. Ehem... "what?" You know, I'm not asking that they fit the whole bill, not at all, but comeon, they got... once again $2000... FROM ME! Is it too much to ask for not quite half of that???!!! So when I say (kindly, I promise) that I think maybe I should get a little more help, she gets mad and tells me how unfair I am being!!! What?!!? As if! Anyways, it progressed into her raising her voice, which really isn't cool because I was trying to be calm and collective about the whole situation... but it was almost like she was antagonizing (sp?) me! She told me that... "FINE! I'll give you more than $100, but let me tell you... things are going to change!" Change? How? "I'll just start charging you rent to live her!" I said fine! But you have to understand, I really don't think I should have to pay too much being as how I'm NEVER there! I leave usually around 8:00 am, and return around 11:00 pm! Ahh... screw it, I'm done. I feel like this isn't making sence, and that perhaps I'm too angry about the whole situation right now to really talk fairly about it. Like I said, I don't mind paying rent... that's not a problem, but how much? Let me know what you guy's thing, and be honest, don't try to spare my feelings.
Okay... back to the present. I went and payed it all today... all $1100 (well, $1000 after the help from my parents... sort of insulting to me). So, guys I'm sorry for not being around lately, this has really been a HUGE set back. Most of you know I'm trying to purchase my own house, work full-time, and pay for classes that I go to full-time. Woe is me. Okay, actually not, I fully understand that there are MANY people out there who have it much more difficult than me, but comeon, I just want a break. Thats it. I'll be back though. Rest assure. I want us to all gtg at the lake within the next month or so (another thread), but for now, I MUST give 100% of my attention to school... I've got finals in the next few weeks, 2 research papers due next week, and 10 journal entries for cinema (easy... but it sounds bad, ).
Anyways, I'm making it (incase anybody was worried)... it's just another uphill battle in life... I just wish for once I had the uphill advantage.
First of all, a $2000 tax dedcution wasn't going to come anywhere close to paying off $1100 in taxes. At your taxable income level that deduction might amount to a tax that is lower by about $100-150. You are probably coming out about the same as you would have if you'd taken the deduction yourself. It sounds like your parents are helping you out a lot, just like mine did when I was in school. There's not much reason to penalize them for that.
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I'll kinda go along with Silver Steak....just let it slide. Once you get your own place (tax deductions there--mortgage interest and head of household, and, at least here in KS, property tax too) and get out of college (usually better income), you'll get back whatever you didn't get this time. A $2000 deduction might be worth $400-500 (figure 28%) in actual refund, and it's not worth fighting over, especially with your parents. Accept the $100 they gave you, swallow real hard, and forget about it.
Yeah, common mistake for people to think that a $3500 tax benefit = $3500 check from the tax man. You have to take that $3500 off your taxable income which only amounts to a couple of hundred dollars in cash back to you.
Even if you did get that full $3500 back from the IRS, I think you'd find that having your own place would cost you A LOT more than that. Living with the parents and letting them have the tax deduction is a great bargain for you!
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I would TOTALLY agree, Stan..... I had to do the same thing all the time I was away in the army, for some reason the folks could claim me on their taxes, and in the long run it paid off for me, they let me live there for a year with no job, and didn't say two words about it, infact they didn't want me to leave.....
besides, living with the folks gives you more fun money to blow on useless things like FORD TRUCKS!!!hahahaha
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Actually, this isn't a "deduction", it's an actual "refund" for up too $2000 for the first two years of college.
My tax lady and I ran the numbers to see what it would be if I were to claim independent from my parents... I would get back around $200... instead of paying $1100. Also, don't forget... if they didn't claim me, I wouldn't have to go off of their income for finacial aid, therefore it would save me money by qualifying me for help from the government.
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