Comments on: Financial Independence Week: When And How To Cut Direct Financial Ties http://www.thesimpledollar.com/2007/01/30/financial-independence-week-when-and-how-to-cut-direct-financial-ties/ Simple, applicable personal finance advice for the modern world Fri, 10 Feb 2012 08:34:37 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Mike http://www.thesimpledollar.com/2007/01/30/financial-independence-week-when-and-how-to-cut-direct-financial-ties/comment-page-1/#comment-764932 Mike Fri, 28 Aug 2009 20:36:26 +0000 http://www.thesimpledollar.com/2007/01/30/financial-independence-week-when-and-how-to-cut-direct-financial-ties/#comment-764932 Robin, Ivy, and Jessica, Technically according to the IRS and how college financial aid system works your parents are allowed to claim you as a depended (while you are in college) up to age 24. IF you are not in college your parents are not allowed to claim you if you are over 18. In order to have financial aid not tied to your parents (nor for them to claim you on their taxes) is possible, but requires some tricky legal maneuvering (there is actually a word for it that is escaping me at the moment). Or you can get married (though I wouldn't get married for just that reason). Having your parents claim your tuition that they are not paying it illegal. Not saying you necessarily want to turn them in for it, but that is what it is. I know this was the case while I was in college as I have been doing my own taxes since I was 14 (it was a 1040EZ until my sophomore year in college when I started having to deal with other things like "allocated tips" and then capital gains on some free stock I received that got merged and I got cash for the partial share after the merger and weird stuff like that). I still do my own taxes w/itemized deductions that include my mortgage interest among other things. It is pretty well spelled out in the instruction book near the beginning under the "Dependents" section (or something like that). Robin, Ivy, and Jessica,

Technically according to the IRS and how college financial aid system works your parents are allowed to claim you as a depended (while you are in college) up to age 24. IF you are not in college your parents are not allowed to claim you if you are over 18. In order to have financial aid not tied to your parents (nor for them to claim you on their taxes) is possible, but requires some tricky legal maneuvering (there is actually a word for it that is escaping me at the moment). Or you can get married (though I wouldn’t get married for just that reason).

Having your parents claim your tuition that they are not paying it illegal. Not saying you necessarily want to turn them in for it, but that is what it is. I know this was the case while I was in college as I have been doing my own taxes since I was 14 (it was a 1040EZ until my sophomore year in college when I started having to deal with other things like “allocated tips” and then capital gains on some free stock I received that got merged and I got cash for the partial share after the merger and weird stuff like that).

I still do my own taxes w/itemized deductions that include my mortgage interest among other things. It is pretty well spelled out in the instruction book near the beginning under the “Dependents” section (or something like that).

]]> By: Robin http://www.thesimpledollar.com/2007/01/30/financial-independence-week-when-and-how-to-cut-direct-financial-ties/comment-page-1/#comment-533977 Robin Mon, 23 Feb 2009 19:54:32 +0000 http://www.thesimpledollar.com/2007/01/30/financial-independence-week-when-and-how-to-cut-direct-financial-ties/#comment-533977 I also actually had a really similar situation. It has caused a lot of resentment between myself and my parents. When I turned 16 and got my first job, I was suddenly on my own for anything that required cash to purchase (though I was still privy to a warm roof and the food in the fridge, health insurance and the like). When I went off to college and was set "free" my parents refused to stop claiming me and my tuition, which they weren't paying any of. It was just salt in the wound that they used the money to buy things like a hot tub. I'm still pretty upset about this and I have a terrible amount of trouble talking to my parents sometimes. Just a thought if you're considering cutting off your kid - there are responsibilities and repercussions on both sides. I also actually had a really similar situation. It has caused a lot of resentment between myself and my parents. When I turned 16 and got my first job, I was suddenly on my own for anything that required cash to purchase (though I was still privy to a warm roof and the food in the fridge, health insurance and the like). When I went off to college and was set “free” my parents refused to stop claiming me and my tuition, which they weren’t paying any of. It was just salt in the wound that they used the money to buy things like a hot tub. I’m still pretty upset about this and I have a terrible amount of trouble talking to my parents sometimes. Just a thought if you’re considering cutting off your kid – there are responsibilities and repercussions on both sides.

]]> By: Ivy http://www.thesimpledollar.com/2007/01/30/financial-independence-week-when-and-how-to-cut-direct-financial-ties/comment-page-1/#comment-533888 Ivy Mon, 23 Feb 2009 17:34:27 +0000 http://www.thesimpledollar.com/2007/01/30/financial-independence-week-when-and-how-to-cut-direct-financial-ties/#comment-533888 I had a similar situation to Jessica's. I got told that because they were paying, I was to let them deduct me... which is fine. But then when they quite suddenly told me that I was on my own they kept claiming me, and I couldn't get financial aid because I had to be off my parent's taxes (for two years in fact). I had to leave school and work full time for a while to save up tuition and finish my degree. I had a similar situation to Jessica’s. I got told that because they were paying, I was to let them deduct me… which is fine. But then when they quite suddenly told me that I was on my own they kept claiming me, and I couldn’t get financial aid because I had to be off my parent’s taxes (for two years in fact). I had to leave school and work full time for a while to save up tuition and finish my degree.

]]> By: Jessica http://www.thesimpledollar.com/2007/01/30/financial-independence-week-when-and-how-to-cut-direct-financial-ties/comment-page-1/#comment-101302 Jessica Mon, 05 Nov 2007 16:52:22 +0000 http://www.thesimpledollar.com/2007/01/30/financial-independence-week-when-and-how-to-cut-direct-financial-ties/#comment-101302 So I know this is a comment on a super old post, but going through your posts on financial independence made me think of something I went through with my parents. If you expect your children to be independent, don't depend on them for tax benefits. My parents told me I would be paying my way through college, which was fine with me. However, I was shocked when I discovered they still planned on claiming me as a dependent on their taxes, and deducting my tuition from their income. By the time I discovered this, my withholding for the prior year had already been set as if I was independent, and I suddenly had a tax bill for a significantly larger chunk of the $15K I'd earned through my 3 part time jobs. This continued until I graduated (although the next year I adjusted my deductions to account for it) and then they complained that their taxes went up when they could no longer claim me. So I know this is a comment on a super old post, but going through your posts on financial independence made me think of something I went through with my parents.

If you expect your children to be independent, don’t depend on them for tax benefits. My parents told me I would be paying my way through college, which was fine with me. However, I was shocked when I discovered they still planned on claiming me as a dependent on their taxes, and deducting my tuition from their income. By the time I discovered this, my withholding for the prior year had already been set as if I was independent, and I suddenly had a tax bill for a significantly larger chunk of the $15K I’d earned through my 3 part time jobs. This continued until I graduated (although the next year I adjusted my deductions to account for it) and then they complained that their taxes went up when they could no longer claim me.

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