Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (13) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: lorenzo2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Re: Help me plan for next year please Date: 10/18/2002 11:19 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
I'm reading between the lines a bit, but I assume you're getting at something like this:

- daughter now in school, you're supporting her
- she graduates next May/June or thereabouts, after which
- she gets a job and becomes self-supporting (hooray!)

So who should get the benefit of her tax exemption? If she's in school at least into May, then you can claim her as a dependent one last time. (The requirement is that she be a full-time student for at least part of five months during the year. I assume that other requirements - support, under age 24, etc. - are met.) It's clearly to your benefit to claim her as a dependent and get that additional exemption. On the other hand, it means that taxes take a slightly bigger bite from her earnings.

I suggest you do as I did - you take the exemption, but reimburse her for the extra tax she then pays. That is, do her tax both ways and give her the difference. It works out fine for her, and you come out marginally better because the reimbursement is less than your tax saving. (All this assumes that your income is larger than hers. If she is stepping into a CEO job or something and will have the greater income, then she should take the exemption and reimburse you!)

Lorenzo
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (13) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement