Should you stop claiming your son or daughter as a dependent on your taxes?

The amount of financial aid a student receives is tied to the amount of money he or she makes and, more importantly, to the amount of money his or her parents make. This fact makes some parents think that they should cease claiming their child as a dependent on tax forms. Many wonder if this independent status will result in greater financial aid thanks to severing the parents' much greater income.

That truth is that for financial aid purposes, the federal government still believes that parents are chiefly responsible for their child's education whether or not they are classified as independent. Further, independent status is not as simple as not claiming your son or daughter on your taxes. They must also meet one or more of the following six criteria:

  • Be at least 24 years old
  • Be married
  • Be a U.S. Armed Forces veteran
  • Be enrolled in a graduate or professional program
  • Be an orphan or ward of the court
  • Have legal dependents other than a spouse

If none of these criteria are met, it is presumed that you will help your child finance their education, even if you won't. Thus, your income will still be considered for financial aid purposes regardless of their independence in your taxes.

Further, if you claim your son or daughter, you receive the Tuition and Fees Tax Deduction which will allow you to deduct up to $4000 in taxable income. You may also qualify for the Lifetime Learning Tax Credit and Hope Scholarship Tax Credit.

All in all, it is better to claim your child than not.

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Reader Question: Saving Money on Tuition and Housing

Reader and parent Krystie posted a question regarding ways for nonresident students to save money on both tuition and dorm fees.

My son has recently started attending college in another state from where we live. We live in California, he is attending college in Idaho. He is currently attending a community college that has many of the same features as a 4-year college, such as dormitories. Are there any hints you can give me to get the tuition and dorm fees reduced for an out-of-state student? The admissions office told us about a WUE form that provides students from other “Western” States with a $950 credit. He is currently staying with a family member but we would like to get him into a dorm. Thanks for your help.

Great question, Krystie.

In response, I have written a new article entitled, How to Pay In-State Tuition at Out-of-State Schools. In addition to the recommendations I have made there, staying in contact with the admissions and financial aid offices at your son's college is always one of the best ways to discover money-saving opportunities.

As far as dorms, I don't know of any special way to save on these costs for nonresident students. To the best of my knowledge, universities charge uniform fees for on-campus housing without regard to residency status. Depending on his exact location in Idaho, the cost of living off-campus may be lower than living in a dorm (as is frequently the case with colleges who have expensive meal plans). If your son lives with a few of his peers and resolves to prepare his own meals each evening, he could save a lot of money this way.

I hope this has been helpful. Best of luck to you and to your son!

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Thank-You Notes: The Secret Edge to Winning a ‘Yes’?

Can a well-timed thank-you note be the key to scoring admission into a highly competitive ivy league college or university?  Well, no.  But students should send them anyway.  And here's why:

It is important to remember that during the college application season, there is more to it than just playing the admissions game.  There are real live people who work every day in the admissions office.  They spend this time of year reading stack after stack of applications and essays, largely going un-thanked.  But they are also busy during the 'off-season'.  They are the tour guides who walked you around campus, and the voices on the other end of the phone when you had financial aid questions.  They mailed the application and wrote the university information booklet.  They set up booths at local high schools and made phone calls to potential applicants.  But most of all, they worked as hard as possible to make the application season as smooth as possible.

All of these positions are done largely without thanks.  When I used to conduct university tours, the highlight of the job was the special bulletin board in the office with all of the thank-you notes we had received.  It was a point of great pride for us to be named personally in a note.

None that we received ever helped an applicant to get accepted, unfortunately.  But the gesture is still nice and always very appreciated.  In an era in which students will cross t's and dot i's in special ways if they think it will help get them into college, it seems too many forget about the general maxims of generosity and politeness.  I have even heard students who said that they wanted to send thank-you notes, but were afraid of saying the wrong thing and hurting their chances

Even more distressing are the countless templates and hints online for notes "guaranteed" to help, as if generosity could be manufactured and monetized.

Send a personalized thank-you because you're genuinely grateful, not for any sort of competitive edge.  And don't just thank interviewers and tour guides.  Recommendation letter writers, high school counselors, and helpful teachers deserve special praise as well.  A little extra courtesy goes a long way in making someone's day.

Students: write personal, physical thank-you notes to everyone who helped you along the way.  And parents: encourage your son or daughter to write them, but also send out a few notes yourself.  We at the tour office loved a good thank-you from a grateful parent amidst the wave of frustrated and angry ones.  It may not help anyone get accepted to college, but it will make you a better person.

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