The Under 40 Financial Planning Guide: Maximize Your Dependents

If you just had a baby, make sure that you get your bundle of joy a social security number. Unless your child was born in November or December of the tax year, you will need to have a social security number to get a deduction for the new dependant.

At the other end of the spectrum, as long as your children are eighteen or younger, you can claim them as dependents. Even if your kids are as old as 23, if they are still full-time students, you can still claim them if you're paying for half of their bills. So keep your records. (If you have a kid that old, you're probably over 40 -- didn't you see the cover?)

This last point may be more important to you from another perspective. If you're 18 to 23 and your parents are declaring you as a dependant, you can't claim yourself as a dependant on your own tax return. This can be a big deal for people who are working while they're still in school.

The simplest solution, if you can afford it, is to keep your income under $6,400 a year while you're under 23 and in school full-time. That way, you don't have to file a tax return at all. If you need to make more money -- and you're getting support from your parents -- your status as a dependant probably means more to them financially than it does to you. Let them have it.

If you have to file a tax return while you're working and a full-time student, your best strategy is probably the most basic: declare no dependants and file the 1040EZ form at the end of the year.