cynthia@RV Posted January 20, 2008 Report Share Posted January 20, 2008 Man and woman have a child and they were never married. There is not a custody order of any kind. They split the visitation 50/50 and each pay for 1/2 of the child care expenses. Child is covered by both of their health insurance plans. Father lives with parents so he can't take the EIC and Mom earns more $ than Dad. Should I file him as S with Dependent and 1/2 of child care and file her as HH, nondependent, EIC, & other 1/2 of child care? Thanks, Cynthia Quote Link to comment Share on other sites More sharing options...
RoyDaleOne Posted January 20, 2008 Report Share Posted January 20, 2008 does the phase "more than half the year" come in to play. 50/50 so they may lose...... Quote Link to comment Share on other sites More sharing options...
jainen Posted January 20, 2008 Report Share Posted January 20, 2008 >>Should I file him as S with Dependent and 1/2 of child care and file her as HH, nondependent, EIC, & other 1/2 of child care?<< No. You should decide which of the two parents is your client and be extremely careful not to violate confidentiality and professional conflict of interest standards. Then you should use normal interview techniques, including review of any available records, to see if your client meets the requirements to claim a qualifying child. Tell your client what you are doing and discuss the possibility that the other parent's preparer might see things differently. Then prepare the return accordingly. Quote Link to comment Share on other sites More sharing options...
cynthia@RV Posted January 20, 2008 Author Report Share Posted January 20, 2008 >>Should I file him as S with Dependent and 1/2 of child care and file her as HH, nondependent, EIC, & other 1/2 of child care?<< No. You should decide which of the two parents is your client and be extremely careful not to violate confidentiality and professional conflict of interest standards. Then you should use normal interview techniques, including review of any available records, to see if your client meets the requirements to claim a qualifying child. Tell your client what you are doing and discuss the possibility that the other parent's preparer might see things differently. Then prepare the return accordingly. OK, he has been my client for several years and now she is coming to me as well. Perhaps the best thing to do is have one or the other of them sign the 8332 each year so they can alternate who gets to take the child each year. Thanks Quote Link to comment Share on other sites More sharing options...
jainen Posted January 20, 2008 Report Share Posted January 20, 2008 >>have one or the other of them sign the 8332 each year << I don't deny that many tax preparers would consider this satisfactory, but in my opinion it doesn't really meet your professional responsibilities because you haven't determined if the child lived with one parent for more than half the year. Taxation is inherently emotional, and if you have any experience with divided families you can see a number of ways this might later become a problem. You can see those ways because you are right in the middle of them. Quote Link to comment Share on other sites More sharing options...
lbbwest Posted January 20, 2008 Report Share Posted January 20, 2008 RE: Jainen's thread; FYI CPAs are sued over this issue frequently, one can not serve two masters or two clients in a potentially adverse situation. Additionally NO two people have physical custody of a child exactly fifty percent of the time; there are cases where it actually comes down to calendars with nights spent at each parent's home. States' courts do not care about Federal Tax law and vice versa. Many decrees these days read joint physical custody which has precise meanings per state law; for Federal tax purposes how many nights Johnny sleeps at mom's or dad's (with proof) rules. lbb Quote Link to comment Share on other sites More sharing options...
Mel in Hawaii Posted January 20, 2008 Report Share Posted January 20, 2008 does the phase "more than half the year" come in to play. 50/50 so they may lose...... How do you divide 365 by 2 and end up with an even number? Quote Link to comment Share on other sites More sharing options...
RoyDaleOne Posted January 20, 2008 Report Share Posted January 20, 2008 How do you divide 365 by 2 and end up with an even number? I was using cynthia@RV statement of the facts as she knew them. One day at grandparents neither parnets had them, and the remaining even. Quote Link to comment Share on other sites More sharing options...
jainen Posted January 21, 2008 Report Share Posted January 21, 2008 >>One day at grandparents<< I don't count a day visiting Grandma as living with her, or even a weekend. Or a weekend with the non-custodial parent, either. It's just a temporary visit away from the primary home. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted January 21, 2008 Report Share Posted January 21, 2008 I'm with Jainen on that. The PRIMARY home is the one that the kid goes to school from, and regardless of the fairy tales we all hear, it is just not practical for the kid not to have one primary home. Sure, he may then spend lots of the summer and break time with the other parent, and many weekends, etc. But there is always a primary home. And that should be the parent that gets the kid, unless that parent chooses to sign an 8332. Frankly, I think that is both legal and fair, because it's the parent that gets the kid up and to school, and helps with homework, etc, that deserves it, IMHO. Quote Link to comment Share on other sites More sharing options...
Jesse Posted January 21, 2008 Report Share Posted January 21, 2008 I'm with Jainen on that. The PRIMARY home is the one that the kid goes to school from, and regardless of the fairy tales we all hear, it is just not practical for the kid not to have one primary home. Sure, he may then spend lots of the summer and break time with the other parent, and many weekends, etc. But there is always a primary home. And that should be the parent that gets the kid, unless that parent chooses to sign an 8332. Frankly, I think that is both legal and fair, because it's the parent that gets the kid up and to school, and helps with homework, etc, that deserves it, IMHO. In many cases there is not a "primary home" and the children go to Mom's one week and Dad's the next so both are getting the kids up for school, helping with homework, etc. It seems this would be really hard on the kids, but they don't have a choice. Many times it's also very difficult to get the point across to your client, whether it be Mom or Dad, that in order to claim the dependent w/out the 8332 you must have custody > than 50%, and to add to it they have a divorce decree saying they can because they are current on child support. Now you have to explain the IRS doesn't care what the divorce decree says because it contains a contingency. Honoring what's in the divorce decree is legal too, it's just a different court you have to settle in. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted January 21, 2008 Report Share Posted January 21, 2008 I do know that there are a few couples who truly do share the parenting, but in my many years of experience, this is rather rare. In most cases it may start out that way, but, as you point out, the kids are the ones suffering when it's done that way, so they seldom put up with it for long. The kids end up insisting on more stability, because while it may be easy with a kid in kindergarten, but when a kid's in higher grades, they have school projects, plans with friends, etc, and they don't want to be hauling so much stuff around all the time. And few families can afford to duplicate everything, so the kids end up staying one place more of the time. Quote Link to comment Share on other sites More sharing options...
RoyDaleOne Posted January 21, 2008 Report Share Posted January 21, 2008 Notice 2006-86 The rule if both taxpayers claiming the child as a qualifying child are the child's parents is that the child is treated as the qualifying child of the parent with whom the child resides for the longer period of time during the tax year. If the child resides with both parents for the same amount of time during the tax year, the child is treated as the qualifying child of the parent with the higher adjusted gross income. Quote Link to comment Share on other sites More sharing options...
jainen Posted January 22, 2008 Report Share Posted January 22, 2008 >>they have a divorce decree saying they can<< You remember when they made the new law that you had to follow the divorce decree, but then they rescinded it before it took effect? Well, California conformed to the new law but not the revision. So now in California we have to count overnights and put the kid on one federal return, then put him on the other state return according to the divorce decree! Quote Link to comment Share on other sites More sharing options...
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