claiming DEPENDANTS

What is the name of your state? GA

made only $11,000 last year, a single parent- working part time. got minimal child support. paying mortgate.

sister lived with me the entire year, made $10,000, is a full time student.

We spent about $5,000 on school fees.

I claimed EIC on her last month? Was that right? I just found out about the $3,000 income rule . My tax preparer says I have nothing to worry about but I fear an audit. He miscalculated my state return and I fear he may be unreliable!

HELP. Does she have to file her own taxes? IF so what do we do? THere is only 1 day left

Yes, she has to file her own taxes. You cannot claim her as a dependent unless you provided over 50% of her support. Since you made only $1,000 more & were supporting a child as well, this is unlikely.

You need to amend your taxes & pay back the extra EIC by Tuesday. (You still get ot claim your child.) If you can't pay it all, you at least need to amend the return by Tuesday to avoid penalties. Make the accountant prepare the amendment before 4/15. Don't go back to that tax preparer next year. By the way, your child was an EIC qualifying child for both you & your sister, so either one of you could have claimed her for EIC. You'll also need to file an extra form showing that you are taking the EIC & the othe eligible person (your sister) is not.

She needs to file a return & claim herself as a dependent. She may be able to take education credits to pay any income taxes. This would increase her refund. She has to file by mail, since the IRS already has her down as your dependent.

When you get your taxes done next year, both go in to see the same person. That way the preparer has all the facts & can decide the most advantageous way to file your returns.

we will take care of this.

What will the IRS do to me if we fail to take care of this in time.

Assess penalties & interest for late filing.