Tax Question (1 Viewer)

Son is in college.  He has no income, and we've always claimed him, and plan to this year also.  Last year all his savings bonds that his grandparents bought him were cashed in by him for a vacation and some HS graduation presents to himself.  He got a 1099-Int this year for the interest on the bonds (less than $1K).

I know that he does not have to file taxes (does not have enough income to trip the requirement), but I'm wondering do I have to claim the income?  If I do, wouldn't it behoove me to have him claim the income, but also have him claim no deductions and let me have him as a dependent, as I'm sure that his tax rate would be less than mine.

I've read the regulations, and they are confusing me.

My daughter was in the same situation last year. We claimed her, she claimed the income. If he owes you can pay it for him. 

russinfortworth said:

Son is in college.  He has no income, and we've always claimed him, and plan to this year also.  Last year all his savings bonds that his grandparents bought him were cashed in by him for a vacation and some HS graduation presents to himself.  He got a 1099-Int this year for the interest on the bonds (less than $1K).

I know that he does not have to file taxes (does not have enough income to trip the requirement), but I'm wondering do I have to claim the income?  If I do, wouldn't it behoove me to have him claim the income, but also have him claim no deductions and let me have him as a dependent, as I'm sure that his tax rate would be less than mine.

I've read the regulations, and they are confusing me.

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It is probably best to file just to help out when filing for student aid.  They will insist on seeing his 1040. 

Working on taxes now and have an interesting scenario, if any experts care to weigh in.

Wife and I live in Kentucky. I work in Ohio, she works in Indiana. However, her corporate office is based in Kentucky, so I don't believe Indiana really factors in here, all her paystubs/W2s say Kentucky...only Kentucky taxes were withheld from her paycheck, and only Kentucky taxes were withheld from mine, which I am led to believe is correct. We should not have to pay taxes state taxes to either OH or IN, since we live in Kentucky...local taxes still apply of course.

We own a house and had our first child in the past year...not sure if this matters, but wanted to include it in case.

1. Do I need to file a Ohio return?

2. According to TurboTax online filing, we can get a bigger refund if we file separately in Kentucky...even though we are filing jointly for federal. We must do this in order to deduct my student loan interest. TurboTax software seems ready to efile our federal and Kentucky returns with these settings, and I would think it would stop or throw up an alert of sorts if this was not allowed. Long story short, can we file jointly on federal and separate on state? And does working outside the state have a factor in this?

Honestly might just go to a pro to be sure, but after putting in a couple hours online,w anted to see what my options were.