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Ray
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Experience:  30 years in civil, probate, real estate, elder law
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My 26 year old daughter is going to college this semester and

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My 26 year old daughter is going to college this semester and we want to give her about 1500 in tuition money. While she lives with us, she is not on our lease. She does however pay us rent, and takes care of her own car payment and expenses. I have two questions. Is there any way we can give her money for tuition and have it credited as such and are we in danger of changing her dependent status if we start giving her money for college?

RayAnswers :

Thanks for your question and good morning.

RayAnswers :

If you are going to pay her tuition here you may want to claims her as a dependent and also you can write off the tuition on your taxes.

RayAnswers :

You would be able to claim this on your taxes and claim here as a dependent since you are providing some support.

RayAnswers :

The FAFSA folks will count parental income here in determining whether she qualifies for aid.As you probably know by now there are only a few limited ways around that.She can marry for instance and that would emancipate here from your income.

RayAnswers :

Overall to me it makes more sense for you to try and claim here as a dependent and write off the tuition.This might mean she has less deductions but overall your income is probably higher than hers and it might mean better savings overall as it helps you more than it hurts her.

RayAnswers :

You might certainly want to review this with your tax preparer in order to make sure you are maximizing the deductions.

RayAnswers :

Being considered an independent student is not merely a matter of being responsible for your own educational expenses. You must meet at least one of the following seven criteria to be declared an independent student for the purposes of the FAFSA:

Be 24 years of age or older by December 31 of the award year;
Be an orphan (both parents deceased), ward of the court, or was a ward of the court until the age of 18;
Be a veteran of the Armed Forces of the United States;
Be a graduate or professional student;
Be a married individual;
Have legal dependents other than a spouse;
Be a student for whom a financial aid administrator makes a documented determination of independence by reason of other unusual circumstances.

RayAnswers :

So here the only likely ways to emancipate are being over 24, marriage, or having a child.I do not recommend those for obvious reasons..

RayAnswers :

If you are afraid that this is going ot mess her up with FAFSA the reality is that there are already counting the parents income and this will not change unless she meets one of the exceptions.

RayAnswers :

It has been my pleasure to assist you today.Please let me know if you have more follow up.Thanks again.

RayAnswers :

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This communication does not establish an attorney-client relationship.Information provided here is not legal advice. Rather it is simply general information.

RayAnswers :

If you have more follow up please let me know.You had several issues and wanted to make sure I covered them all.

Customer:

She is divorced. And she is 26 years old. And we don't want to claim her as dependent. She works full time and if we claim her as dependent, (which I don't believe we can as we do not supply half of her income), is there anyway we can help her other than by just making an outright gift?

RayAnswers :

It would be a gift then.You cannot write it off here if she is not a dependent.I just don't see any deduction here for you.

RayAnswers :

You would not change her dependent status unless you decided to claim her as a dependent here which you might well do.She should be able to deduct her tuition overall on her taxes if she is paying it.

RayAnswers :

The reality is that you are gifting it here and if you are not claiming here there is no way to write it off.

RayAnswers :

Again I wish I could tell you otherwise.

RayAnswers :

Thanks for the follow up.

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