legally married, physically separated, MFJ filing, dependency test

[Treasur2]

All of 2018 couple is legally married. But each lived apart for all 365 days in 2018. He=SP, She=TP. TP=my client.

I went through IRS dependency wizard (very helpful) to make me walk through the basics child by child. I'm still uncertain.

https://www.irs.gov/help/ita/whom-may-i-claim-as-a-dependent

TP does pass the dependency test on all children. SP does not. Sp provided ...zero, nada.....financial support of any child during calendar 2018. In addition to NOT living with them.

The question; if file MFJ.....and only one parent passes test, do they both pass?

I am trying to show/convince my client the TP. That she should file as HOH instead (She qualifies for MFJ, MFS, HOA and single) SP is pushing her to file MFJ, so has to cut his anticipated liability, which will be material to him\them. I've even told her she could take her refund and ...gift....it to him. She has a major "feel sorry for him" complex.

I'm fairly confident, but disappointed, that they are seen as "one entity" via MFJ (the essence of the status), thus the children are "dependents". but want to make sure I'm not wrong or missing something.

[TaxGuyBill]

The question; if file MFJ.....and only one parent passes test, do they both pass?

If they file Jointly, yes, they can claim the kids as dependents. If they file separate tax returns, only your client can claim the dependents.

(She qualifies for MFJ, MFS, HOA and single)

No, she would not qualify for Single. She is married.

Even if she technically qualifies for MFS, it would be foolish to file that way. As you said Head of Household would be better.


Do you know what his income is? If so, have you tried a test return as MFJ, and then two test returns with her as HoH and him as MFS? In many cases, having her file as Head of Household and him as MFS will have a better result than MFJ, but that would depend on each of their incomes and other situations.

[Burke]

She will also assume joint liability for the tax return filing as MFJ. I find it curious that "he provides zero support - nada" and yet he seems to have a large? tax liability. This does not bode well on the surface of it, since he is avoiding his responsibilities for support, and/or is not withholding in sufficient amounts. Note that if he is entitled to any refunds, and she has court-ordered support, or he has any kind of prior tax liabilities, (state or federal) etc,. etc they may be attached under debt-offset. The idea of her gifting him the money IF she feels it necessary is an alternative. He gets the benefit and she avoids the liability. Do they still have a joint bank account? Where would the refund go? There is a reason they are separated.......

[Rapid Robert]

TP does pass the dependency test on all children. SP does not. Sp provided ...zero, nada.....financial support of any child during calendar 2018. In addition to NOT living with them.

I applaud your effort, but wonder how you could get through the dependency determination wizard and still think that the amount of support provided by the taxpayer (or spouse) has anything to do with dependency (assuming these are young children, not some other type of dependent).

"If they file Jointly, yes, they can claim the kids as dependents. If they file separate tax returns, only your client can claim the dependents." Correct that on a MFJ return, dependency test can apply using either spouse, it's not necessary for both. If they file separate returns, there could still be the release of "exemption" to the non-custodial parent (Form 8332).

The original scenario does not indicate which spouse has higher income, or whether community property rules apply, as they do in about one-third of the country (spouses are living separately, but we don't k now why, or what their future intentions are). On the custodial parent's proposed HOH return, is there enough income to cover all the support and household expenses for the parent and kids, plus all taxes (income, payroll) plus other deductions if any, since the other spouse is paying nothing? Who owns the house, if they are not renters? Since extra due diligence is now required for federal HOH filing, make sure you as preparer are not opening yourself up to any possible due diligence penalties.

[Treasur2]

I can assure all that all hypo returns and scenarios have been run. Yes, I know SP income (they have been clients for 4 years). Yes, I am acutely aware of negatives to MFS. No children are not all young. There is also, AOTC, EITC, etc. etc. involved. I do not burden you with that because it is irrelevant to my question. The answer to which is "Yes", from your confirmations above.

I ran the dependency test on all 4 children (age ranges 23 to 12) for both parents independently, based on my first-hand knowledge of actual living situation vs. classic assumptions of MFJ. That is if even one "parent" does NOT actually pass the test(s) of being able to take any particular dependent (child) because the other parent does and that.....if.....they were to file MFJ. The MFJ makes them "one entity" in the eyes of the law. That's all I wanted to get confirmation on.

I may not be even doing the return if the SP gets his way. It is not entirely up to me. I know the best thing for each to do financially speaking. Yet, as in any split, logic (numbers) and emotions (theirs) rarely agree.

[Lion]

You may be better off NOT preparing both returns for a separated couple. It's hard to advise one on his best course of action when that may not be the best course of action for her. Fire one. Fire both. Have them sign an iron-clad statement saying they understand your conflict of interest if you keep both. CYA.

[Rapid Robert]

. That is if even one "parent" does NOT actually pass the test(s) of being able to take any particular dependent (child) because the other parent does and that.....if.....they were to file MFJ. The MFJ makes them "one entity" in the eyes of the law. That's all I wanted to get confirmation on.

If that's your take-away from this discussion, you still have it wrong. MFJ filing is an election that two married taxpayers make, it does not make them "one entity". A dependent is claimed by a taxpayer, not an entity.

[Treasur2]

So who is the taxpayer when MFJ?

[Lion]

It takes TWO taxpayers to file MFJ, to agree to file MFJ. For ease of differentiating on the return, one is labeled Taxpayer and one Spouse.

And, I agree that she can NOT file Single if still married.

I would probably fire one client or both. If he's not even supporting his own children, I expect too much disagreement with each other and with me. I do want to get paid promptly and am much too old to let them bring their drama into my life and my livelihood.