Your Tax Question - 079

Dear John, How much do I have to earn before I have to file a tax return.  I am a single college student who works at a restaurant, and I live with my parents.  Thanks, Jim T.
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Hi Jim,


Basically if you earn more than $3,650 you are required to file a tax return.  There are nuances in the code (there is always nuances in the code) but that is the general income requirement.  You can refer to IRS Publication 501 to help you further or you may email me and I can help - it's kinda what I do.  http://www.irs.gov/publications/p501/ar02.html#en_US_2010_publink1000220708


Thank you,
John

Your Tax Question - 006b

This is a continuation from - Your Tax Question - 006a...
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Wendel, You should also consider who is your Qualifying Relative for determining who is your dependent as an exemption on your taxes. People who failed to meet any one of the Qualifying Child Tests, you may find that they do qualify as a Qualifying Relative. A Qualifying Relative must satisfy just four tests:

1. The Relationship Test
2. The Gross Income Test
3. The Support Test
4. The Dependency Test

1. The Relationship Test

• A child or decedent of said child
• Sibling or step-sibling
  
• Parent or decedent of either
• Step-parent
• A sibling's child
• In-Laws (son, daughter, mother, father, brother, sister)
• any individual who shares the sajme principal abode as the tax-payer

2. The Gross Income test

• Must have less than $3,650 of income

3. The Support Test

• Over half of the dependent's total support for the year must have been provided by the tax-payer.
• Special rules apply for multi-support agreement for children of divorced persons.

4. The individual must not have been the qualifying child of anyone else during the year. All in all, many people qualify to be your dependent if they have lived in your home for the year but then the Gross Income and Support Tests may bump them out as easily as they qualified. Be sure to discuss all of this with your tax professional. Best to you, John
PS. If you don't have a tax professional yet, be sure to contact me about how you can get on my client list. Email me