Filing Status Issues and EIC

[PapaTony]

A couple of situations:

1. I filed Client A's 2008 taxes. He told me he was married but wanted to file MFS. The wife lived with him as well as her permanantly disabled brother all year. This year he went to JH (35% discount) to file and they told him they could amend the prior year to get him the Earned Income Credit. I told him Married Filing Separate filing status does not qualify for the EIC.

How can he get it from them?

2. Client B lives with her unemployed fiance all year (no kids). She wants to claim him as a dependent. OK. Wants to file Head of Household. Not OK. I tried to explain that the relationship/qualified relative criteria is not the same for dependency and HoH filing status.

Right? TTB pg 3-14 says :Any person the TP can claim as a dependent, but NOT including "any person who is the taxpayer's dependent only because he or she lived with the taxpayer for all of 2009"


I either have a LOT more to learn (which is a given anyway) or a lot more to teach.

[David1980]

"How can he get it from them?"

You simply fill out the return however you want to fill out the return. Lie, make up fake deductions or fake income to maximize EIC. EIC fraud is rampant, and my guess is the majority of it is never caught (or at least they never go after the taxpayer).

There's a difference between the ability to fill out a form in order to get certain deductions and being allowed to claim those same deductions. You can do a ton of stuff that isn't allowed. It just isn't allowed.

I mean it's a bit like asking "If the speed limit is 70 how can you drive 90?"

[Gretel]

You are correct on both counts. No. 1 can be answered only by the amended tax return, which is probably wrong.

It's hard to run up against all these gods who can get big refunds and know everything.

[powerage]

#1 sounds like a novice preparer or a fraud preparer. I did a 1 week course at JH 5 years ago and was thrown to the wolves. The training we have now is top notch and in-depth, and the required tests are not that easy. They also encourage you to become an EA. There is a multitude of training, all interactive. I also did a 12 week book course a couple years back. That was not fun.

One of the first things that stuck with me is MFS is generally not the best way to go because of all of the credits that are lost and that the clients would be entitled to. I just saved a couple $899 Saturday.

#2 Not sure of HOH without doing the personal interview myself, but she can claim his dependent exemption. They are engaged.

[taxea]

You are correct on both counts. No. 1 can be answered only by the amended tax return, which is probably wrong.

It's hard to run up against all these gods who can get big refunds and know everything.

Thankfully their days are numbered.

As for HOH neither qualifies they are married and live together.

[S T]

Other Side

If I am interpreting what is in the original post, might be talking about JH amending year 2008, which could mean amending from MFS to MJ. Not knowing all the details of income etc, maybe EIC would be available. Seems unlikely given the income restrictions, but then anything is possible. We all know that filing MFS would not qualify. Probably not enough facts in the OP to make the decision.

And then like everyone else posted, could be a preparer that really does not know the rules or skirts them.

Sandy