Can My College Student File Independent? The Risks of Claiming the AOTC скачать в хорошем качестве

Can My College Student File Independent? The Risks of Claiming the AOTC

You make too much money to claim the $2,500 American Opportunity Tax Credit (AOTC). So, you decide to "emancipate" your college student—you stop claiming them as a dependent so they can file their own return and claim the credit themselves. You think you found a loophole. You are wrong. You just walked into the "Support Trap." Dependency is a matter of fact, not choice. If you paid their tuition, or if they took out Parent PLUS loans, they are legally your dependent whether you check the box or not. As The Finance Observer, I’ve performed a forensic review of IRC Section 152 and the "Poison Pill" hidden in IRC Section 25A(i)(6) to expose why this strategy fails 99% of the time. In this video, we dissect the difference between "Support" and "Earned Income," why the "Kiddie Tax" wipes out any refund you hoped to get, and how the FAFSA "Direct Data Exchange" will freeze your financial aid if you try this. FORENSIC BREAKDOWN: 0:00 The "Emancipated Student" Gambit: A dangerous game for high-income parents 01:40 The Law: IRC Section 152 (Why Dependency is a Fact, not a Choice) 02:23 The "Support Test": Why living in a dorm counts as living at home 03:31 The Scholarship Trap: IRC Section 152(f)(5) (Why scholarships are ignored) 04:16 The "Poison Pill": IRC Section 25A(i)(6) (Why Loans are Support but NOT Income) 05:28 The Result: Why a student with no job gets a $0 refund 06:05 The "Kiddie Tax": How Form 8615 taxes scholarships at the parents' rate 07:15 The Audit: Notice CP87A (The "Dueling Dependents" Letter) 07:44 The Penalty: The 2-Year and 10-Year Bans for "Reckless Disregard" 08:52 The FAFSA Collision: How the Direct Data Exchange (DDX) freezes your aid DISCLAIMER: I am The Finance Observer. This content is for educational purposes only. To claim the refundable portion of the American Opportunity Tax Credit, a student generally must provide more than half of their own support with earned income. Student loans count as support but are not earned income. Intentionally misclassifying a dependent to claim tax credits can result in a 2-year or 10-year ban on claiming credits. Always consult a qualified CPA.