What combination of deductions and exemptions can the typical full-time college student who is employed during the summer, or perhaps during the school year, claim? Why?

What will be an ideal response?

Answer: The typical employed full-time college student, who is claimed as a dependency exemption by his or her parents, can only claim the standard deduction to reduce tax liability. A dependency exemption cannot be claimed for anyone who earns more than the exemption amount. However, the income test does not apply to children under the age of 19 or to full-time college students under the age of 24. Finally, the parents must provide over half of the student's support. Given the relationship, income, support, and citizenship test, the parents can claim the dependent exemption. Because only one exemption can be claimed on any tax form, the typical full-time college student is limited to using the standard deduction to reduce his or her taxable income, and ultimately the tax liability.