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Author: bigdan195 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121585  
Subject: W-4 Form & Dependents Date: 2/5/2012 12:58 PM
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I'm not sure if this is the right place to post this, but here goes:

I have concerns about whether or not my son should change his status on his W-4 form from 0 dependents to 1 dependent, and I should change my W-4 from 4 dependents to 3.
Right now, he is claiming 0 deopendents and we are claiming him as a dependent. It is my wife, me, my 20 year old daughter (going to college full time), and my son.
My son is 22 years old and graduated from college last May, 2011. In June, 2011, he got a full time job, and on his W-4, I told him to 0 dependents.

He is living at home, saving some money, paying off his college loans, and pitching in money for rent, groceries, gas for cars, etc.

On Jan 1, 2012, they asked him at work to update his W-4. I said keep it as 0 dependents, because I am claiming him as a dependent on my W-4.

Now, I am not sure if that is best thing to do for everybody. Can anybody help? All input is appreciated. Thanks.
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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114959 of 121585
Subject: Re: W-4 Form & Dependents Date: 2/5/2012 1:51 PM
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I have concerns about whether or not my son should change his status on his W-4 form from 0 dependents to 1 dependent, and I should change my W-4 from 4 dependents to 3.

It's nitpicking time. You claim withholding "allowances" on the W-4, not dependents. You claim dependents on your tax return. While there is some correlation, there are a lot of things that affect withholding allowances other than dependents.

Right now, he is claiming 0 deopendents and we are claiming him as a dependent. It is my wife, me, my 20 year old daughter (going to college full time), and my son. My son is 22 years old and graduated from college last May, 2011. In June, 2011, he got a full time job, and on his W-4, I told him to 0 dependents.

I assume that you plan on claiming him as a dependent on your 2011 return. That's probably OK. The key question, really the only pertinent question, is whether or not he provided (paid for) more than half his own support in 2011. If he didn't he's your dependent. If he did, he's not. For details about this test see Publication 501.

He is living at home, saving some money, paying off his college loans, and pitching in money for rent, groceries, gas for cars, etc.

On Jan 1, 2012, they asked him at work to update his W-4. I said keep it as 0 dependents, because I am claiming him as a dependent on my W-4.


I hope you won't be able to claim him as a dependent for 2012. For that year the rules change dramatically since (I assume) he will not be a full-time student at least 1 day in 5 different calendar months in 2012. Since he is no longer a "qualifying child" (term of art) you look to the "qualifying relative" rules, which include an income test. Even if you provide all his support in 2012, if he has gross income in excess of $3,800 he does not qualify as your dependent. Again, see Pub 501. (The latest 501 may not include the 2012 gross income test amount but rather the 2011 number.)

W-4's: You should not include his dependency exemption when doing the calculation. He should probably be claiming two allowances, per the W-4 worksheet.

Phil
Rule Your Retirement Home Fool

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