Hoh

[Unregistered]

Mother (unmarried) owns house and pays all household expenses and has highest AGI.

Son age 30 lives with mother, but earnings over $3,200, so does not qualify.

Married daughter, who is separated from husband more than last 6 months of the year lives with Mother and has two children. Daughters earnings are $28,000. Daughter filed return HOH, claiming two daughters, CTC, EIC. She does not contribute to the household expenses.

Question can daughter file as HOH when she isn't providing more than half the cost of maintaining the home, the Mother(grandmother) is. Is there any way to qualify the Mother(grandmother) for HOH?

[Bill Tubbs]

Mother(gma) should be HOH

Well, you could file mother(gma) as HOH, as she would be legally entitled to it. But:
1) caution her that it could cause problem for her daughter that claimed HOH
2) is it worth it? If daughter's HOH were to be denied, she would then be MFS, and if her separated-husband itemized, she would then have to itemize too.

You are not responsible for how everyone else files, just responsible for the returns you sign off on.

Bill

[jainen]

the whole family

The daughter can not claim Head of Household because she doesn't pay the household costs. Her filing status must be MFS. As just a completely unfounded guess, I would say she won't agree and you will lose a client over this.

The grandmother could file Head of Household with one of the children, but it would mean that the daughter could not use that child for EIC. The daughter could still claim the other child.

The son could claim the two children instead--remember that support doesn't matter for qualifying children. Of course, if his sister insists on claiming her own children, there's nothing he can do about it. Too bad, because depending on his income on the EIC chart, it might produce a lower total tax for the whole family.

[Gretel]

If daughter files as she is supposed to - MFS - no EIC for her anyway.

[jainen]

Good point!

>>no EIC for her anyway<<
Good point! I missed that.

Also, although it would be nice to help all three taxpayers work out the best arrangement, there are conflict-of-interest and confidentiality issues for the practitioner in the middle.

[Bill Tubbs]

group meeting

Also, although it would be nice to help all three taxpayers work out the best arrangement, there are conflict-of-interest and confidentiality issues for the practitioner in the middle.

But, if you mention to the client (which I'm presuming is the mother/gma) that if you could review everyone's tax situation you could find the solution that provides the best overall tax situation for everyone combined, the client may either be able to:
1) bring all involved to your office, and/or
2) bring you all the papers

So, if all the people involved agree to share their info in this manner, I don't see a problem. If Gma comes with all the papers, you could return them all to her when completed, and tell her who needs to sign where. Then they need to figure out amongst themselves how to divide up all the spoils.

Of course though, if they don't all agree to this then not much you can do.

Bill