Parents – Do not prepare your child’s income tax returns yourself if you have a professional prepare your income tax returns. You can end up costing yourself money.
If you claim your child on your return, they can’t be claimed on their return. Conversely, if you file your child’s return before yours, and you forget to find and check the box that the child was claimed on someone else’s return, your return will be rejected if you try to claim them again. When you claim your child you may receive the child tax credit which can be up to $2,000 for 2023. Your child will not get that credit if they claim themselves.
If your child is in college, you may be able to claim the education credits, based on your income. Your child may not have an income high enough to get the credits. Or if your income is too high to get the credits yourself is it possible your child’s income is high enough for them to get the credit?
If your child is in college and they get any merit or other based scholarship money that covers more than tuition that money may be taxable to them.
These are just a few reasons to coordinate the preparation of your income tax returns with your child’s returns. Have the same professional do both.