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Showing posts from January, 2014

Special tax tip for parents

Eventually, every parent in the country will reach a point where they are no longer be able to claim their children as dependents for federal income tax purposes. When this happens, parents of America, please be sure to update your withholding information with your employer.

I mention this because I had a client in my office today was expecting me to tell her that she was getting a refund of at least $2,000. In reality, she owed more than $800 to the Internal Revenue Service.

Her son graduated from college in 2012 and was financially independent of her for all of 2013. This meant that she could no longer claim him as a dependent. Unfortunately, she did not update her withholding, which is what put her in that predicament.

She wasn't happy about this. Unfortunately, though, there wasn't a darn thing I or any other income tax professional could do about it.