HOH with married parent

[kkuch]

Taxpayer's has claimed both of her parents the last eight years. Neither has worked, they both live with her, and they both have been fully supported by her. Her mom took a job last year and made 20k. Can the taxpayer still claim the father and file HOH? I assume yes. Then the mom should file married filing sep when filing her own taxes?

Thanks in advance.

[TaxGuyBill]

Yes (but see below). Well, it's actually the other way around ... if mom files separately, THEN that allows the taxpayer to potentially claim the father as a dependent (and for Head of Household).

BUT with $20,000 of income from the mom, you need to make sure that the taxpayer is paying over 50% of the support of the father in order to claim them him as a dependent.

[spanel]

Can she? Maybe? Why? Mom will have to file and will have tax liability. If she filed MFJ, she will have none. Also, the parents now made $20,000.. this is going to be hard to justify 50% support as well, regardless if the husband didnt work.

I'm going with a Hard no.

Chris

[EvenKeelTax]

Seems claiming father could be a $500 tax credit for taxpayer. If mom files MFS under age 65 standard deduction is $12,200 so she'd have $8000 taxable income. Even over age 65 there is substantial taxable income so her added tax liability would be well over $500. MFJ standard deduction > her w2 income so nothing taxable. Possibly state tax considerations above and beyond all that; I agree with Chris I would not do that even if support test for father could somehow be justified.

[kathyc2]

Seems claiming father could be a $500 tax credit for taxpayer. If mom files MFS under age 65 standard deduction is $12,200 so she'd have $8000 taxable income. Even over age 65 there is substantial taxable income so her added tax liability would be well over $500. MFJ standard deduction > her w2 income so nothing taxable. Possibly state tax considerations above and beyond all that; I agree with Chris I would not do that even if support test for father could somehow be justified.

Your analysis missed that HOH has a higher standard deduction and higher break points between marginal rates.

The 20K is not an automatic disqualifier. If a support worksheet shows daughter paid over 1/2, she would qualify as HOH and taking other dependent credit.

[kkuch]

I appreciate all the help and insight. It would make an $800 difference for the mom to file joint with husband and a $3300 difference for the daughter to file HOH with the dad. The daughter makes about 80k. We are in Southern CA so 20k doesn't go as far out here. The daughter pays 100% of the mortgage, utilities, household bills, insurance, and food. She said this totals over 40k annually. I am doing my due diligence and everything seems to check out. Thanks for all the advice!

[kkuch]

Child is 32 and parents are 55. No SS or retirement income.
I guess there's always the possibility of the father working for cash somewhere, but there has been absolutely no mention of that whatsoever.

[spanel]

Mom earned $20,000 and could not support herself/husband on said money? Daughter pays all household bills and gets reimbursed nothing?? Really??

Chris

[TAXNJ]

Mom earned $20,000 and could not support herself/husband on said money? Daughter pays all household bills and gets reimbursed nothing?? Really??

Chris

Why not?

Each situation is different.

You don't have all the facts and documentation as the Original Poster.

Original Poster is doing their due diligence and will decide upon the review of the facts and documentation.

[Toobusy]

I agree with kkuch, however the support worksheet still needs to be done.

[Toobusy]

If the parents only income is $20,000 they do not have to file a return. The Filing Requirements for Married filing Jointly, and both are under 65 years old is $24,400.

Besides, under the Dependency Tests for 2018 (I do not have a hardcopy of TTB 2019, so it might read differently), it states that "a person cannot be treated as a dependent if he or she files a joint with a spouse. This rule DOES NOT APPLY if the joint return was filed only as a claim for refund and no tax liability would exist of either spouse if they had filed a separate returns. So, I gather if neither of them filed because they are within the Filing requirements guidelines that she can use the father as HOH.

[spanel]

If the parents only income is $20,000 they do not have to file a return. The Filing Requirements for Married filing Jointly, and both are under 65 years old is $24,400.

Besides, under the Dependency Tests for 2018 (I do not have a hardcopy of TTB 2019, so it might read differently), it states that "a person cannot be treated as a dependent if he or she files a joint with a spouse. This rule DOES NOT APPLY if the joint return was filed only as a claim for refund and no tax liability would exist of either spouse if they had filed a separate returns. So, I gather if neither of them filed because they are within the Filing requirements guidelines that she can use the father as HOH.

You are half correct. There would be Zero liability if they Filed MFJ and noone claimed Dad. There would be tax liability if Mom Filed MFS as she made more than $12200.

Chris