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October 26, 2019
Question

I am 21 year college student whose parents have always claimed me as dependent. I had a summer 2019 internship making $14,000 and also paid some tuition. How do I file for taxes/get a refund?

  • October 26, 2019
  • 2 replies
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So I am a student in New York City that is 21. My parents have always filed joint with me as dependent (I think, I don't understand any of this jargon/terminology). This summer I had a finance internship in NYC where I made approximately $14,000 and walked home with about $9800 post tax (I think, I don't remember). I'm really confused on how exactly taxes work and what things I need to or what forms I need.

 

Is 14,000 enough income to file for taxes? Or did I make too much money and have to file for my own taxes? How do I file for taxes? Do I file with my parents or by myself?

 

Also, I recently just paid $868 dollars in tuition out of pocket. Can that expense reduce the taxes I have to pay? How exactly do I do that? How can I reflect my out of pocket tuition expenses?

 

What documents or items do I need from my employer and how do I maximize my  tax refund.

Most importantly, how do I maximize my refund?

 

Please advise.

2 replies

VolvoGirl
Employee
October 26, 2019

Yes you have to file your own return.  If you are under 24 and a full time student your parents can still claim you no matter how much you make.  On your return you need to check the box that says you can be claimed by someone else.

 

You will get a W2 at the end of the year in January from your employer.   Just enter it into Turbo Tax exactly as shown.  

shahjacobAuthor
October 26, 2019

Im confused. how can I file for my own taxes if my parent can claim me as an independent? Also, doesnt me being claimed significantly reduce the refund I get?

 

the company i work at pro-rated the $14,000 i made at approximately $63,700. Does that mean I can get a good tax refund or a small one? Would filing with my parents help me or not benefit me?

 

What form do I need to file out to fill it out independently?

Carl11_2
Employee
October 26, 2019

So I am a student in New York City that is 21. My parents have always filed joint with me as dependent (I think, I don't understand any of this jargon/terminology).

Only married people can file a joint return.  Your parents claimed you as a dependent on your parent's joint return. (Assuming your parents are married to each other and did file as married filing joint, as opposed to married filing separate.)

 

This summer I had a finance internship in NYC where I made approximately $14,000 and walked home with about $9800 post tax (I think, I don't remember). I'm really confused on how exactly taxes work and what things I need to or what forms I need.

Whoever the employer/contractor was that hired you will send you the appropriate tax reporting documents at tax filing time. They have until Jan 31, 2020 to put them in the mail to you.

 

Is 14,000 enough income to file for taxes? Or did I make too much money and have to file for my own taxes? How do I file for taxes? Do I file with my parents or by myself?

 

There is no monetary limit that would would refer to as "enough". You could earn $1 and file a tax return if you wanted to - though for $1 you wouldn't be legally required to.  Basically, as a single person if you earn less than $12,000 during the tax year then you are not required to file a tax return. However, if the employer withheld taxes on that income then you might "choose" to file a tax return in order to get those withheld taxes refunded to you.

 

Also, I recently just paid $868 dollars in tuition out of pocket.

The deduction for out of pocket qualified education expenses expired at the end of 2017. Congress did not renew the deduction for the 2018 tax year, and chances are they won't for the 2019 tax year either. But if they do renew that deduction, you don't qualify to take it. That's because you *QUALIFY* to be claimed as a dependent on your parent's tax return. It doesn't matter if they actually claim you as a dependent or not. If you "QUALIFY" as their dependent, then you don't qualify for the deduction.  (Unless congress were to change that in the law, of course.)

 

 How can I reflect my out of pocket tuition expenses?

 

Unfortunately, the way the laws are on this right now, you can't.

 

What documents or items do I need from my employer

 

Depends on if you were hired as a W-2 employee, or a 1099-MISC contractor. But either way, they are required by federal law to send your your tax documents by Jan 31, 2020.

 

Most importantly, how do I maximize my refund?

 

You have nothing to "maximize" here. Your first $12,000 of earned income is tax free. The remaining $2K (give or take) will only be taxed at 10% - the lowest tax bracket. The only possible way to reduce it more is to donate that remaining $2K to a qualified charity, and 50% of your donation will be tax deductible.

Now if this is "truely" earned income, you can open a traditional IRA and with $14K of earnings if you can contribute a maximum of $6,000 to a traditional IRA and not pay taxes on that contribution. But first you should read https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-contributions to make sure limits below the maximum contribution amount allowed don't apply to you.

 

As a reminder, when you complete your 2019 tax return in 2020, you ***MUST*** select the option for "I can be claimed on someone else's return". You don't have a choice here. But your parents do have a choice to claim you or not. For you, if you just *QUALIFY* to be claimed on someone else's tax return. (and I'm 100% sure you do) then you must select the aforementioned option on your tax return. (This is assuming you did not graduate before May 1st, 2019. If you graduated on or after that date, that may or may not change things.)

shahjacobAuthor
October 26, 2019

I actually don't follow whatsoever. So let me provide some more context/ask some more questions.

 

  • My summer internship had a pro-rated salary of $63,700. I made $14,000 pre-tax (2800 each check every two weeks for 10 months) and about 9800 after taxes (so basically 30% of it went to taxes). What do you mean the first $12,000 are tax free? They were literally taxed and I didn't walk away with 14,000, so how could the first $12K be tax free?
  • When I file for taxes, what form do I have to fill out? What boxes do I have to check off? Do i file as independent or not or do I file as a dependent? 
    • Couldn't filing as a dependent reduce my tax refund?
  • When my company sends me the money i made documents, what is that called? the w4?
    • how do I use that information to file the taxes?
  • What do I actually do to get the refund into my bank? I don't like my parents digging through my mail and would prefer my bank account
  • how much does it cost to file taxes and what time should I do it?
VolvoGirl
Employee
October 26, 2019

I said they will send you a W2 form in January.  And you didn't pay taxes, you had tax withholding taken out.  The withholding is just an estimate on how much tax you will owe on your total income.  

 

You enter the full gross income into your tax return.  

Then you get to subtract a 12,000 Standard Deduction 

That gives you your taxable income

The Tax is calculated on your taxable income

Then you subtract the federal withholding to give you a Refund or more Tax Due.

 

Everyone gets a Standard Deduction.  Which means the first 12,000 of income is tax free.