I've been a "relative" dependent on someone else's return for years. I just discovered that my "unearned income" was too high for them to do so! WHAT DO WE DO?

Forum|Forum|7 years ago
June 4, 2019
1 reply
0 views

I'm an adult child, so not a "qualifying" child. I always looked for the income limit of the dependent and didn't realize the threshold was lower if I only had "unearned" income. I don't work, but I have savings and a few investment accounts that apparently generated too much interest for me to be claimed on their returns. I'm SO worried about the repercussions for them (I'm fine dealing with my own repercussions) because I DO THEIR TAXES every year and didn't know I was doing anything wrong- so it is MY FAULT. What should we do now? What should we expect?

TurboTax Premier Windows

Best answer by JulieR

Well, if your gross income exceeded the personal exemption amount in the years they claimed you, (for 2018 the amount is $4,150) you are right that claiming you as their dependent was incorrect.

The best advice I can provide is that they should amend their returns for the years in question and that you should file your own returns to report your taxable income for those years. If these returns generate tax due for those years, interest and penalties may be added. It is best that you remedy this situation as soon as possible.

[Edited 03.12.2019 | 4:52 PM pst]

J

JulieRAnswer

Well, if your gross income exceeded the personal exemption amount in the years they claimed you, (for 2018 the amount is $4,150) you are right that claiming you as their dependent was incorrect.

The best advice I can provide is that they should amend their returns for the years in question and that you should file your own returns to report your taxable income for those years. If these returns generate tax due for those years, interest and penalties may be added. It is best that you remedy this situation as soon as possible.

[Edited 03.12.2019 | 4:52 PM pst]

G

groverxpupAuthor

Employee

Thank you SO MUCH for answering so quickly. The $4,250 is what I was originally using this year to determine whether I still qualified as a dependent on their joint return. But then I ran into all this "unearned income" stuff. Are you saying that my ONLY mistake is not filing a personal return for the years that my unearned income was considered over the limit for a dependent? And that as long as my total income didn't exceed the personal exemption amount for those years ($4,250 for 2018), that their tax returns were CORRECT in claiming me?