A new client who became a widow a few years ago has 6 children ranging in age from 3 to 18. Each child receives $4260 in taxable income on a 1099-R from PERA and $3120 in social security benefits. Precious preparer had filed 6 1040A's with each child owing approx. $300 in federal tax each year. If mom uses the child's income to provide over 1/2 of his/her own support, can't each child, regardless of age, keep his own exemption and not even be required to file a return because each would be under the $8950 gross income test? It would save the family tax dollars since the mom isn't eligible for the child tax credit due to income level.
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children's taxes
You need to check the chart on TTB 3-12 lower corner Chart B.
When the child's unearned income exceeds $900, the child need to file a tax return.
The child does not claim their own exemption (most of the time) because the parents have provided over half the support.
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Unearned income does not include SS benefits, I believe. I have kids who get nothing but SS and we do not file a return for them. Yours have other 1099R income, so they would file.
I think I have that right, now that I edited....."I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur Godfrey -
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Who are you?
Please complete your profile. taxeBelieve nothing you have not personally researched and verified.Comment
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Profiles are not required on this forum. Lots of us don't bother. Please be very careful not to include any identifying information to protect yourself.Comment
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I can't find my profile...
... but last year I lost a lot of weight......
Now, what did you say Mom's income was??"I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur GodfreyComment
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My profile is hanging in any post office for anyone who cares to see it."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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Mom's total income was $25,724, including $3,120 of nontaxable social security income. The income for the 6 kids total $44,280, each getting $3120 social security income and $4,260 1099-R income. It seems to me that if all the income was used to support the household, each child would be providing more than half of his/her support. I appreciate your responses.Comment
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See TTB 3-19 for determining support. Note - FMV of lodging is part of it. There is a worksheet in Pub 17 for that purpose also. BTW, my profile looks like Alfred Hitchcock's.Originally posted by joeljj View PostComment
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I've looked at the worksheets for determining support. I'm thinking the kids provide over 1/2 of their support. The mom is using the kids' funds as well as her own to pay all the bills for everything. Since the kids' funds exceed the mom's funds by a substantial amount, I can only conclude that once you divide the total household support dollars by the 7 household members, each child would be providing more than a 1/2 shareof their own expenses. SInce they would then file as "single" claiming their own exemption, they would then use the Chart A Filing Requirements chart on TTB page 3-12, and would not even be required to file a return. Am I off-base somehow?Comment
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If they do provide more than 1/2 of their own support, although not required to file, if they do file they could receive the $300 stimulus. Assuming they did not receive it last year.Comment
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Just my own opinion of how I would handle - I would agree with you providing the FMV of the lodging was reasonable (Not a $1 Million mansion, I hope). KEEP ALL your records including the worksheets you use to figure support. Be prepared to explain to IRS all the facts (I have been there before in a situation like yours). Be prepared to have your initial contact at the IRS not understand the situation. Most important - if you are right, don't back down.Originally posted by joeljj View PostComment
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