Hoh Eic Fubar

[Possi]

Well, this is the biggest fubar of my career.

Young couple, friends of mine, separated last year and have a son.

Virginia does not recognize legal separation.

They wanted to file jointly. We discussed joint and MFS only.

I filed them as joint and didn't even THINK about her HOH status with the baby!!!!

I have screwed them out of over $3000 of free money!

Is there any salvation?

I know I can't go from MFJ to MFS which is what his would be.

Can anyone save me from myself? I am absolutely sick over this. Absolutely sick.

[Roland Slugg]

Simple solution

Dear Possi

What's the problem? Just send her a check for $3,000.

If you don't like that solution ....

If both H & W now wish to file MFS returns, they can revoke the MFJ return by filing MFS returns by April 15, 2008. (Regs §1.6013-1(a))

[Possi]

Salvation?

How do I do THAT???

[les grans]

Wow. Here's how I would do it. I would take out my checkbook and write my friend's name on the line where it says "Pay to the order of" and then I would write "3,000.00" in the box where the dollar sign is, and then I would write out, in words, "Three thousand" on the long line in the middle of the check, followed by a long squiggly line.
Be sure to sign and date the check, too.

[Possi]

Revoke the return?

How do I revoke a return?

[erchess]

Form 1040X

is used to amend a return. I believe that they can amend from MFJ to MFS and HoH as long as they do so before the filing deadline. If you do not know how to do this, have your clients go to someone who does.

[Possi]

ok

I know how to do a 1040X.

I didn't realize I could amend and change from MFS to MFJ ever.

I'm so glad that I have smart people working with me.

[JohnH]

Reference

See the bottom right-hand column of page 3-13.

I have question about this - should they file a 1040X or a "Corrected Return" ?
I thought it should always be the latter if the original return is changed before Apr 15.
Is changing from MFJ-to-MFS an exception to this rule?

[Possi]

MFS to MFJ

You CAN change from MFS to MFJ as long as it's done by 4/15.

You do this my filing a 1040X. In this case, I'll file the 1040X for Taxpayer (him) changing his FS to MFS (Virginia does not recognize legal separation, so no single fs).

Then I will file a new return for spouse claiming the child, as HOH.

[David1980]

I have question about this - should they file a 1040X or a "Corrected Return" ?
I thought it should always be the latter if the original return is changed before Apr 15.
Is changing from MFJ-to-MFS an exception to this rule?

I'd still like to see it written somewhere you're supposed to do this "corrected return" for anything at all. As near as I can tell it's basically myth that's circulating around that there is even such a thing. I mean, you would expect 1040X instructions, 1040, tax topic 908, etc... to all tell you to do a corrected return by 4/15 if in fact you are supposed to do a corrected return.

Yet they all say if you need to correct a return to use form 1040X.

But yes, MFJ to MFS is doable if by tax deadline. After that you're stuck.

[Peachie]

I am confused

You CAN change from MFS to MFJ as long as it's done by 4/15.

You do this my filing a 1040X. In this case, I'll file the 1040X for Taxpayer (him) changing his FS to MFS (Virginia does not recognize legal separation, so no single fs).

Then I will file a new return for spouse claiming the child, as HOH.

Am I missing something here? If he files MFS, how will she be able to file HoH? Will he not link to her social security number? In addition, MFS will not allow them to claim EIC. I know that HoH will, but please straighten me out here. How can this be done? What has my thinking so screwed?

Peachie

[JohnH]

I've been corrected

I've been corrected concerning my "Corrected Return" comment - please disregard it.

[BP.]

Am I missing something here? If he files MFS, how will she be able to file HoH? Will he not link to her social security number? In addition, MFS will not allow them to claim EIC. I know that HoH will, but please straighten me out here. How can this be done? What has my thinking so screwed?

Peachie

Have a look at your TTB 3-14, bottom left paragraph "Married Individuals Considered Unmarried." Assuming the Mom in Possi's scenario lived apart from spouse last 6 months of the year, and she meets the other requirements listed, she can be HOH, and he'd have to be MFS.

[Nashville]

(Virginia does not recognize legal separation, so no single fs).

Possi, I can't imagine Virginia law dictating what you can or can't do on a federal return, except in cases where tax law makes deference to state law or fallout. (Examples might include community property, or interlocutory decrees, etc.) Virginia has zero authority to proclaim whether a person is eligible for a particular filing status.

Virginia MAY determine when and whether a divorce is final, and the fallout from this may affect the return. I can say that it is common in our tax prep industry to file "single" on someone who has moved out of the house. For myself, I breathe a sigh of relief when a client tells me there is a temporary order, and I don't pursue it beyond getting the question answered.

[Peachie]

Ah so!

Have a look at your TTB 3-14, bottom left paragraph "Married Individuals Considered Unmarried." Assuming the Mom in Possi's scenario lived apart from spouse last 6 months of the year, and she meets the other requirements listed, she can be HOH, and he'd have to be MFS.

Thank you BP. Though I have done taxes for quite some time, I am always learning. This board and people like you will make me a "learned scholar" one day :-)).