Terry D EA Posted February 20, 2016 Report Share Posted February 20, 2016 I found it difficult to assign the title line to this post so it didn't sound as though it would be a very simple situation. I apologize for the lengthiness but here is the scenario: 1. Client and granddaughter have lived together in the grandmother's home for all of 2015. 2. Granddaughter gives birth to a daughter in July of 2015 who obviously also lives with grandmother. 3. Granddaughter gets married in July of 2015. 4. Husband and granddaughter and great granddaughter live with grandmother for the remainder of 2015. 5. In January 2016, husband and baby's father splits. Here is where things begin to get messy. Husband files 2015 tax return as single which we all know that was done incorrectly. Also, the husband refuses to give his social security number to allow his soon to be ex-wife (granddaughter in No. 1) so she can file MFS. Granddaughter's income is 5400.00. Here is my take on this: Grandmother (my client) files HOH and claims the dependency exemption for her granddaughter and the baby. They meet all of the tests. Granddaughter is the qualifying child and dependent and can be as her income is below $6300.00. Grandmother gets the EIC and child tax credit for the baby. Granddaughter is 19 years old. I think all is well here correct? Granddaughter could have been a dependent filing a MFJ return just to get a refund of $229.00 that was withheld. Can't do that because husband filed a single return and will not provide his SS#. Am I keeping things straight here? Should or could the granddaughter file a "paper MFJ" return with a statement that the husband refused to give the SS#. I think I have had my head wrapped around this too long which is clouding up my thinking. Opinions please. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted February 20, 2016 Report Share Posted February 20, 2016 Agree on the grandmother claiming granddaughter and great grandchild. Granddaughter should file MFS although if she did file as single on that tiny income it would undoubtedly go through just fine. Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 20, 2016 Report Share Posted February 20, 2016 1. Client and granddaughter have lived together in the grandmother's home for all of 2015. 1.- My client and granddaughter lived together in 2015. 2. Granddaughter gives birth to a daughter in July of 2015 who obviously also lives with grandmother. 2.- Granddaughter gives birth to a daughter in July of 2015 who obviously also lives with my client. 3. Granddaughter gets married in July of 2015. 4. Husband and granddaughter and great granddaughter live with grandmother for the remainder of 2015. 4. Husband and granddaughter and great granddaughter live with my client for the remainder of 2015. 5. In January 2016, husband and baby's father splits. 5. In January 2016, newly weded couple splits. If the bold statements above are correct, I think this is the situation: Without knowing the income of the husband, I am not sure if your client can claim granddaughter as a dependent. She should be able to claim the just born baby as a dependent and qualify for EIC. I would have to consider support to make her HH. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted February 20, 2016 Report Share Posted February 20, 2016 Without being able to question the ladies, I agree with Terry. Except, granddaughter files MFS on paper. However, with a birth during 2015, there are bound to be lots of medical/insurance/medicaid forms around that might have baby daddy's SSN on them; if so, e-filing will work. You may discover that daddy claimed his baby. If so, parent trumps grandparent. 1 Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted February 20, 2016 Author Report Share Posted February 20, 2016 >>>>>>>Without knowing the income of the husband, I am not sure if your client can claim granddaughter as a dependent. She should be able to claim the just born baby as a dependent and qualify for EIC. I would have to consider support to make her HH. <<<<< I would agree with your concern but, the husband will not communicate at all and refuses to provide any information other than his return was filed and filed as single. On 2/20/2016 at 11:35 AM, kcjenkins said: Agree on the grandmother claiming granddaughter and great grandchild. Granddaughter should file MFS although if she did file as single on that tiny income it would undoubtedly go through just fine. Isn't there some ethical requirement to file an accurate return?? I want to be careful here as I really trust and appreciate your comments and judgment and have done so for years. I agree the return would probably go thru but I don't feel right doing so. Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted February 20, 2016 Author Report Share Posted February 20, 2016 4 minutes ago, Lion EA said: Without being able to question the ladies, I agree with Terry. Except, granddaughter files MFS on paper. However, with a birth during 2015, there are bound to be lots of medical/insurance/medicaid forms around that might have baby daddy's SSN on them; if so, e-filing will work. You may discover that daddy claimed his baby. If so, parent trumps grandparent. Agree, but I did present this to them several times and they insist that the baby's daddy doesn't know the baby's SS". Even at this, I informed them that I would know within 10 mins or so as to whether he did or did not claim the baby. My initial take was granddaughter files paper MFS return. She should still get the refund but... doesn't that negate the dependency for my client? The regs only mention a married dependent filing a joint return to obtain a refund. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted February 20, 2016 Report Share Posted February 20, 2016 Filing a joint return for other than just a refund would negate the dependency for your client. But, granddaughter is not going to file MFJ. I think you're OK. Paper. Actually less of a problem if daddy filed claiming baby, as IRS will write to both of them but probably after sending refund. 1 Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 20, 2016 Report Share Posted February 20, 2016 If father files with the baby, father will win and your client will qualified only for HH (if she otherwise qualifies) but will not be able to claim the exception. Father can go to SS office to get the social security number of his son because he misplaced it. (He misplaced it by leaving it near some people). Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted February 20, 2016 Author Report Share Posted February 20, 2016 49 minutes ago, Pacun said: If father files with the baby, father will win and your client will qualified only for HH (if she otherwise qualifies) but will not be able to claim the exception. Father can go to SS office to get the social security number of his son because he misplaced it. (He misplaced it by leaving it near some people). . I know this and if you read my other posts, it was discussed with the client as a possibility and she needs to be prepared. 1 hour ago, Lion EA said: Filing a joint return for other than just a refund would negate the dependency for your client. But, granddaughter is not going to file MFJ. I think you're OK. Paper. Actually less of a problem if daddy filed claiming baby, as IRS will write to both of them but probably after sending refund. So, are you saying here that married dependent could file a MFS return to get the refund? Ex-hubby won't cough up the SS# so the only choice would be paper. Am I understanding you correctly? Quote Link to comment Share on other sites More sharing options...
Lion EA Posted February 20, 2016 Report Share Posted February 20, 2016 Yes. Well, I remember that to be the case. If it were my client, I'd step through a chart in TTB or Pub 17 or my research software. But, doesn't MFJ disqualify the dependency unless only to get a refund? Aren't all other filing statuses OK? Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted February 20, 2016 Author Report Share Posted February 20, 2016 I have to agree with you. I guess I have confused my own thinking with the MFJ thing. While sometimes taxes and regulations don't make sense or applying common sense is a dangerous thing, the wording and check box entries would suggest just any other filing status could be used and doesn't negate the dependency. Heck I can't even get the adding machine to feed paper correctly so maybe I need to get away from ALL of this stuff for the day. 2 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted February 20, 2016 Report Share Posted February 20, 2016 Don't worry about it, but do take a break. I've been trying to proofread a partnership for a week, maybe more. Finally finished and printed it. Don't know why I can't let go. Just always checking one more thing! I need to pick up speed. Promised some things for Wednesday when I see biz clients and other things are due Friday in NY and it's closing in on corporations and.... I tell my kids to strive for excellence, not perfection. Perfection isn't always possible, especially with ambiguous tax laws. Really dreading some 1095s this year, for instance. You've warned your client what could go wrong and to notify you immediately if she gets any letters, right? So, hand her the paper returns to sign and mail. You've done your best with the information you collected. 1 Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted February 21, 2016 Report Share Posted February 21, 2016 On 2/20/2016 at 0:03 PM, Terry D said: Isn't there some ethical requirement to file an accurate return?? I want to be careful here as I really trust and appreciate your comments and judgment and have done so for years. I agree the return would probably go thru but I don't feel right doing so. I agree, Terry, please don't read it as me advising her filing single. Was really just commenting on how screwed up 'the system' is. The grandmother in this mess is clearly the one supporting everyone else, so it's a shame the bum confused the issue by marrying her, really. I'm wondering though, if their marriage license paperwork has both their SSNs? That's something she can get a copy of, if he took it with him. And would simplify the MFS filing. Quote Link to comment Share on other sites More sharing options...
Hahn1040 Posted February 21, 2016 Report Share Posted February 21, 2016 perhaps I am reading something incorrectly here ...but if grandaughter is 19 unless she is a full-time student she is a qualifying relative not a qualifying child and the gross income test for qualifying relative is $4,000 3 Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted February 22, 2016 Author Report Share Posted February 22, 2016 The granddaughter is a full time student and is qualifying child as I stated in my original post. But... thanks for asking. Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted February 22, 2016 Author Report Share Posted February 22, 2016 3 hours ago, kcjenkins said: I agree, Terry, please don't read it as me advising her filing single. Was really just commenting on how screwed up 'the system' is. The grandmother in this mess is clearly the one supporting everyone else, so it's a shame the bum confused the issue by marrying her, really. I'm wondering though, if their marriage license paperwork has both their SSNs? That's something she can get a copy of, if he took it with him. And would simplify the MFS filing. KC- I would never think you suggested or implied for me or anyone do anything unethical. It may not seem like it, but you and I have been around on this board and the older ATX board since 1998 and I am sure that I know very well that you wouldn't advocate filing anything incorrectly so I do apologize that I didn't see the sarcasm in your response which I should have. I will ask about the marriage certificate as I didn't think about that. The waters were muddied a bit with the granddaughter now having educational expenses which she states only she paid approx. 500.00 and no one is sure who paid the rest. Form 1098-T shows amounts billed of 8k and scholarships of 3161.00 and she doesn't know where the rest of the money came from to pay for her schooling so I can only take the 500.00 + 3161.00 as the actual amounts paid for the AOC on my client's return. It just doesn't get any better than this. 1 Quote Link to comment Share on other sites More sharing options...
joanmcq Posted February 22, 2016 Report Share Posted February 22, 2016 Maybe she took out loans that went directly to the school? Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 22, 2016 Report Share Posted February 22, 2016 15 hours ago, Hahn1040 said: perhaps I am reading something incorrectly here ...but if grandaughter is 19 unless she is a full-time student she is a qualifying relative not a qualifying child and the gross income test for qualifying relative is $4,000 ONLY your own children (son and daughters) can make more than $4K for 2015, correct? (if they are under 19 or under 24 and full time student). Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 22, 2016 Report Share Posted February 22, 2016 2 hours ago, Pacun said: ONLY your own children (son and daughters) can make more than $4K for 2015, correct? (if they are under 19 or under 24 and full time student). No. The relationships that are considered a "child" and allowed under the "qualifying child" rules includes the son, daughter, stepchildren, foster children, stepbrother or stepsister, half brother or half sister, and lineal descendants of any of those. If any of those meets all of the rules to be a qualifying child AND are also under 19, or under 24 AND a F/T student, then they can make more than $4K and still be a qualifying child for the dependency exemption. There is also the exception to gross income to be considered if any of those are permanently and totally disabled where certain income can be excluded when determining whether or not the "child" meets the gross income test. The relationships allowed under the "qualifying relative" rules are broader that I won't go into for this discussion, but those are limited to under $4K of income, unless the person meets the test of permanently and totally disabled and falls within that exception to exclude income from sheltered workshop from gross income. 2 Quote Link to comment Share on other sites More sharing options...
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