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Who gets dependent and HOH?


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#1 Janitor Bob

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Posted 13 February 2008 - 11:26 PM

Please help...I want to make sure this is done right.

I am preparing tax returns for two clients. They are not married but have one child together (born in January 2007) and lived together all year.

She has W-2 income of $13,764
He has W-2 Income of $45,117

The note in their tax folders state that she wants to claim the child as a dependent....but who really should get the dependency exemption and the asociated credits?

My thinking is that, since they both agree, she can claim the dependency exemption, but that he should file as HOH with the child tax credit and that she should file as Single and would not qualify for the EIC....Just gets the dependency exemption.

If I treat the child as her qualifying child for EIC, she gets a few thousand in EIC...If the daughter is treated as his qualifying child, nobody gets the EIC because his income is too high

OR.....If both agree, can she claim the deoendency, HOH, CTC, and EIC?

They rent the home, and, based on incomes, I feel that he easily provides more than 50% of the cost of keepig up the home.

This couple is the type that will come back on me hard if this is not done right and IRS audits them....So I need to do this one "by the book"

#2 LindaB

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Posted 14 February 2008 - 09:24 AM

They can't split the benefits. The child is a qualifying child for both of them, and they must decide which one will claim the child and everything that goes along with it. He could file HOH, get dependent exemption, CTC, (no EIC, income too high) and she could file single, no dependent, no EIC.

Or she could claim the child, get dependent exemption, CTC and EIC but I would still file her single if she didn't pay for more than half the cost of the home. Then he would file single with no dependents.

Try it both ways and see which is more money for them.

(You can only split the benefits in the case of divorced or separated parents)

#3 Janitor Bob

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Posted 14 February 2008 - 09:32 AM

They can't split the benefits. The child is a qualifying child for both of them, and they must decide which one will claim the child and everything that goes along with it. He could file HOH, get dependent exemption, CTC, (no EIC, income too high) and she could file single, no dependent, no EIC.

Or she could claim the child, get dependent exemption, CTC and EIC but I would still file her single if she didn't pay for more than half the cost of the home. Then he would file single with no dependents.

Try it both ways and see which is more money for them.

(You can only split the benefits in the case of divorced or separated parents)


Thanks.....I did what you suggested in scenerio # 2......I am just so burnt out on this issue......The last three returns I have prepared (actually 6 returns for 3 couples) have been this exact same situation. Unmarried parents living together with children.

....Just wait until they see my bill....They really do not understand how much time and effort it takes to maximze their respective refunds (legally, that is)

#4 Booger

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Posted 14 February 2008 - 12:19 PM

To solve this whole mess, Congress should state that if the father and mother
are not married, NEITHER gets to claim the illegitimate kids. Would save US
a whole lot of time. (It's ALL ABOUT US, anyway).

Booger




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