- 3 years ago
So, DH’s mom has not be very great at making financial decisions. She has spent most of her life as a single mom making very little money (like less than $25k) for a family of 4 while DH was growing up. So, needless to say, she is always looking for ways to increase her income/get the most from her tax refund.
Well, all of her children are now grown, though two live at home. DH’s brother lives at home, is 22 and is a college student. So she can claim him, that’s fine. Well, DH’s sister is 20, lives at home, is NOT in school and made about $13k last year.
According to the IRS, you can only count your child as an a qualifying dependent if:
- The child is under age 19 at the end of the year and younger than you or your spouse, if you file a joint return
- The child is a full-time student under age 24 at the end of the year and younger than you or your spouse, if you file a joint return, or
- The child is permanently and totally disabled at any time during the year and any age.
Here’s the tricky situation….DH’s mom frequents a check cashing/pay day loan place quite often called Advance America. While there one day, they mentioned doing tax prep services. They ran her taxes (paper process) and told her that she can claim DH’s sister, and that increased her tax refund from $100 to $1600 because of the Earned Income Tax Credit.
Now, I know we aren’t tax professionals, but we don’t see how she could possibly claim DH’s sister. It doesn’t make any sense. We think they are making a mistake (especially because it’s a young 18 year old, non-tax pro doing the preparation).
Unfortunately, DH’s mom didn’t listen to us and has filed (and paid their $160 fee-when she could have used our Turbo Tax for free). To make matters worse, DH’s sister had already filed her own taxes and claimed herself since she was certain she couldn’t be claimed. So, now, the IRS will see she was claimed twice. Ugh, not even sure how that situation is going to shake out.
Any tax/accounting bees out there? Any advice we can give to DH’s sister? Should she contact the IRS? Will she be penalized or will DH’s mom be penalized?
ETA: FWIW, we actually ran all of DH’s mom’s tax info in turbo tax and it said that she could NOT claim his sister. The only way she could possibly be claimed was if she made under $3,900 in the year…which she didn’t because she made $13k.