I made alot more money than my girlfirend this past year, and am unsure which one of us should claim our child as a dependent. She may get more than I do as a return because she made so little, however. Since we're not married, only one of us can claim her. Anyone have any experience and know what the best way to go is? I tried using one of those IRS calculators, but without knowing exactly how much she made and the Ferederal Income taxes taken out, it's nearly impossible to figure.
It really depends on how much your girlfriend earned this year, and what deductions each of you have already filed previously. As long as she earned over $11,000 (which is a guestimate...I have not reviewed this year's eligibility requirements yet) your girlfriend would receive the maximum credit for the child, but at the same time so should you. The only reason to delay this decision is if one of you have extended tax liabilities (like back taxes, overdue student loans, etc) and some of the funds could be delayed or seized by the government. If these problems do not exist, then it is not a big issue who claims your child. As far as your calculations go, you will receive a set amount for the credit and it will offset any taxes you owe. Your return will only diminish once you earn over $75000 as an indivisual, so if you are past that then let her claim. You may end up with less overall than your girlfriend does, but that will only happen if you were going to owe taxes from the start or you make over $75k.
Do you use computer Tax software programs (ie TaxCut)? Not expensive if you want to buy it and load it up. But you need the real #'s to know for sure. If so, run it both ways to decide once you get the W2's, 1099s, etc! Then submit the best one.
She probably earned right around 11,000. My guess is it's probably pretty close to that, given what she makes and how much she worked. I don't make over 75K in a year, nor do I owe any back taxes. The more I read about it I think you're right in that it's not really going to make a huge difference which one of us claims her.
You can go to the IRS website after Jan 15th and file absolutely free...there is no need to buy tax software. If you're still unsure (or just want to double check the math) fill out the tax forms for both of you and switch the credits back and forth. It should be the same increase either way, but it will only take an extra 2-3 minutes to know for sure. Here's the IRS link; once filing is available just click the "free file" button and choose from a company that will be completely free for you. http://www.irs.gov/efile/article/0,,id=118986,00.html
