Income for divorced taxpayer

[FEDUKE404]

Filing status

You're right - there's no way she provided over 1/2 the cost of maintaining a household. I guess that's why I was confused when her attorney told her to file as head of household. I don't want to do something on her tax return that is a disadvantage in court, yet I'm not going to fudge on what is right and what she does and does not qualify for. It seems to me that she's going to need to file as single and claim the kids under that. She'll have to report her income and pay SE tax and she'll get only a small amount from EIC. Other than that, I don't know what else she would qualify for that would help her taxes, or what else needs reported on her tax return.

I'm not sure the facts as presented would support a "single" tax return. . . . .

FE

[Gary2]

I'm not sure the facts as presented would support a "single" tax return. . . . .

Agreed. Furthermore, the facts don't clearly support her claiming any dependents. First, the possibility of her being a dependent of her parents must be ruled out, remembering that there is no residency requirement for a qualifying relative who meets the usual QR relationship test.

[Burke]

I'm not sure the facts as presented would support a "single" tax return. . . . .
FE

Correct. Since HOH is out, MFS is her only option. Don't depend on the attorney or Child Support Services to understand all these tax rules. They are both wrong, given the information presented here. It does not appear she can claim ANY of the kids because she may not be able to claim herself. Her parents (the grandparents) may be able to claim her AND the kids, qualifying for certain credits depending on their income. (CTC for example, part of which may be refundable.)

[David1980]

With the second job bit sounds like we are talking about the 2013 tax return? What is the marital status as of 12/31/13?

[Burke]

. She told me her attorney said that she might have to pick up another job to balance things out on her tax return. Can anyone explain why that would be? Does she need a higher income in order to file in this case? Or does it look better with all the divorce legalities if she has a higher income? I'm just trying to understand this kind of situation as I've not dealt with something quite like this before. Thanks in advance for any comments and advice!

"Balance things out?" You gotta love these attorneys. And no, if she is looking for child support, etc, higher income is not going to help.

[TaxGuyBill]

Agreed. Furthermore, the facts don't clearly support her claiming any dependents. First, the possibility of her being a dependent of her parents must be ruled out, remembering that there is no residency requirement for a qualifying relative who meets the usual QR relationship test.

That's an excellent point. In fact, if the mother's parents are able to claim her and the grandchildren, it most likely would work out better financially that way.

[mactoolsix]

Post removed for more research

[tax123]

Agreed. Furthermore, the facts don't clearly support her claiming any dependents. First, the possibility of her being a dependent of her parents must be ruled out, remembering that there is no residency requirement for a qualifying relative who meets the usual QR relationship test.

So here's what I'm thinking: the tax code says very clearly that the taxpayer cannot claim any dependents if the taxpayer, or spouse if filing jointly, could be claimed as a dependent by another taxpayer. In this case I think that the mother technically could be claimed by her parents as a dependent relative as her gross income was definitely less than $3,800 and she did not provide over half of her support. With her only making $500 it seems safe to assume that she couldn't have possibly provided over half of her own support or that of the three kids. However, under the tiebreaker rules it says that if no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. So correct me if I'm wrong, but it looks like the father couldn't claim the kids because they never lived with him and the mother couldn't claim them because she could be claimed as a dependent on another taxpayer's return. If in that case whoever has the highest AGI gets to claim the kids (in this case the father would definitely have a higher AGI) how does that work out? What would happen if the grandparents claimed the daughter and all three kids?

[TaxGuyBill]

We don't know if the grandparents can claim the mother.

The mother is NOT a qualifying child, but MIGHT be a qualifying relative. The support test for a qualifying relative is that the grandparents must provide over 50% of support. We don't know that. The mother "separated earlier this year" so the husband probably provides some support for that time period. The husband or State may have been providing some support after that, and the mother may be living off of savings.

Let's say that mother IS claimed as a dependent by grandparents. Mother can not claim children. If children did not live with father for half the year, they are not "qualifying children" for him. If they DO live with grandparents for over half the year, they ARE qualifying children for the grandparents. If grandparents are only ones that can claim children as "qualifying children", then there the tiebreaker rules don't apply.