1 OR Tri-County Training 2014 Filing Status and Dependency Review Married, Single, and More Exemptions Qualifying Children and Relatives nd More Pub 4012

1OR Tri-County Training 2014

Filing Status and Dependency Review

Married, Single, and MoreExemptionsQualifying Children and Relativesnd More

Pub 4012 – Tabs B and CPub 4491 – Part 2Pub 17 – Chapters 2 and 3


Five Choices for Filing Status

Single Married filing jointly (MFJ) Married filing separately (MFS) Head of household (HH) Qualified widow(er) (QW)

NTTC Training – TY 2014

Pub 4012 Tab B


Filing Status

Two criteria: Marital status on last day of tax year

Federal definition – “married” Legal marriage under laws of any state

or country Does not include civil unions or

registered domestic partners Type of dependents, if any


Pub 17 Ch 2


Form 1040



Intake/Interview Sheet


Check Part II entries on Intake Sheet

Ask questions – verify


Single

Not married as of December 31st

Married, but legally separated No dependent children at home



Married Filing Jointly

Married on last day of year Common law marriage

If recognized in state where started Spouse died during current year/not

remarried Generally, most advantageous filing status



Married Filing Separately

Taxpayer chooses to file MFS Spouse has already filed MFS Married but separated and not filing MFJ Not eligible for most tax credits Rare cases – more advantageous

Generally, no children in home



Head of Household – Unmarried

Provided home for qualified child Might not be a dependent

Provided home for related dependent >50% cost of maintaining home for

dependent parents living elsewhere



Head of Household – Married

Lived apart all of last 6 months of year Provided home for:

Child, stepchild, or eligible foster child for over six months

No other relatives qualify, including grandchildren



Qualifying Widow(er)

Spouse died in one of two past years Has dependent child or stepchild in home

all year Grandchild not eligible

Maintained home for child >50% of cost

Can file QW for two years only



Turn to the Decision Tree


Back of QC/QRTrifold and

Pub 4012Page B-1


Special Notes

Child is considered to have lived with taxpayer all year if born or died during year (but not stillborn)

Child who is dependent of non-custodial parent under Rules for Divorced or Legally Separated Parents still qualifies custodial parent for HH filing status if all other requirements met



Exemptions

Reduce taxable income Two Types

Personal exemptions Dependent exemptions

Qualifying child Qualifying relative

$3,950 deducted from income for each one

Oregon Tri-County Training – 2013


Personal Exemptions

● One for taxpayer and one for spouse when filing jointly

● Taxpayer or spouse is ineligible if another can claim him/her as a dependent



Personal Exemptions

Widow/er can file MFJ and claim two personal exemptions in year of spouse’s death If not remarried by 12/31 If not divorced or legally separated on date of

death MFS can claim spouse – if no gross income and

not dependent of another taxpayer



Dependent Exemption

Person other than taxpayer or spouse who entitles taxpayer to exemption: Qualifying child

OR Qualifying relativeBut note: a child doesn’t have to be your child

and a relative doesn’t have to be your relative, but can be your child!



Exemptions

Dependency exemption tests General tests

Taxpayer cannot be dependent of another

Dependent cannot file joint return (except to only get a refund)

U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico



Tests to be a Qualifying Child

Relationship test Age-Student-Disability test Residency test Support test Entitlement test

Pub 4012 – page C-3



Tests to be a Qualifying Relative

Not a qualifying child of another Qualifying relative (next slide) or member of

household all year Gross income under $3,950 Taxpayer provided over 50% support

exception for multiple support



Qualifying Relative (cont)

Son, daughter, stepchild, foster child or descendant of any

Sibling or immediate descendant of sibling Parent, grandparent, aunt or uncle Step parent or step sibling In-laws (parent, child, sibling)



Qualifying Child Tri-Fold

● Replaces a dozen Pub 4012 charts

B-1, B-2, B-3, C-3, C-5, C-6, C-7, C-8, G-3, G-8, G-9 and I-4



Follow the arrows

If the answer to the question in Box 1 is “yes,” follow the yes arrow to Box 3.



Follow the arrows

If the answer to the question in Box 3 is “yes,” follow the yes arrow to Box 5

And ask the question in Box 5



Blue boxes

When you get to a blue box, STOP●The blue box lists ALL the benefits for which this child qualifies the taxpayer●Read the whole box. Important information is included in parentheses and footnotes after most benefits



Start with Qualifying Child Chart

Always start with the Qualifying Child Chart (Chart 1) – you will be directed to Qualifying Relative Chart (Chart 2) if appropriate

Easy to mistake child of a non-custodial parent as a qualifying relative – always start with the Qualifying Child Chart



QC of More Than One Taxpayer

Who can claim the child if two taxpayers have the same qualifying child?

1. If only one is a parent – the parent2. If both are parents, the one with whom the

child lived the greater number of nights3. If both parents claim the child, the parent

with higher Adjusted Gross Income (AGI)


Pub 4012 pg C-4

Pub 17 pg 234


QC of More Than One (cont)

4. If a parent could claim the child but doesn’t, the household (and family) member with the highest AGI

5. If neither are parents, the person with the highest AGI



Uniform Definition of a QC

In general, only one person can treat the child as a QC for all the following benefits (provided the person is eligible for each):

Dependency exemption Head of household filing status Earned Income Credit Child Tax Credit Child/Dependent Care Credit Exclusion for Dependent Care Benefits



Child of Separated Parents

Limited situation Parents are divorced or legally separated or

lived apart the entire last half of the year Child was in custody of one or both parents

more than ½ the year At least ½ child’s support was provided by

one or both parents (or step-parents)




● Agreement Pre-2009 divorce decree Form 8332 or similar

● Allows non-custodial parent to claim some benefits based on the child, while custodial parent retains other benefits

● Without an agreement, custodial parent claims the child




Non-custodial parent can claim: Dependency exemption Child tax credit Education credits Medical expenses that he or she paid




Custodial parent can claim: Head of household filing status Dependent care credit Earned income credit Medical expenses that he or she paid



Note…

Dependents cannot claim exemptions for dependentsi.e., taxpayers who can be claimed as a dependent on someone else’s return cannot claim any exemptions for themselves or their own dependents

Pub 4012 – page C-1

Oregon Tri-County Training – 2013 34

Documents

1 OR Tri-County Training 2014 Filing Status and Dependency Review Married, Single, and More Exemptions Qualifying Children and Relatives nd More Pub 4012