8th Annual Anandtech Tax Time Thread (OP Updated 14th Jan)

[GiggleGirl]

You should see how much claiming her will affect each of you.

If you have a decent relationship, then the parent that has the best benefit should claim the child and handle a payout to the other as agreed on.

ie. If the child is worth an extra $3K to you and only $2K to him (based on other factors); then it would be best for you to take the child, get the maximum value and then pay to the father what he would have obtained had he claimed the child. The same goes in reverse, if he would be better off than you in claiming.

this is a good idea. we had originally did something like this and just then split it down the middle. i can ask him if he would be willing to do this.

i was just reading more information about the child tax credit and im soooo confused right now. i DIDNT claim her as of right now in my taxes and its giving me credit for the child tax but not the EIC. im thinking i should remove her as a dependent entirely for now. soooo confusing!

 

[Xcobra]

this is a good idea. we had originally did something like this and just then split it down the middle. i can ask him if he would be willing to do this.

i was just reading more information about the child tax credit and im soooo confused right now. i DIDNT claim her as of right now in my taxes and its giving me credit for the child tax but not the EIC. im thinking i should remove her as a dependent entirely for now. soooo confusing!

As far as I know, you must be claiming a child in order to get the child tax credit, in which case her father qualifies this year. I believe you can still file as HOH even though you are not claiming her since you maintain a household for a child. However, I am not sure so I will get back to you on this.

 

[GiggleGirl]

As far as I know, you must be claiming a child in order to get the child tax credit, in which case your husband qualifies this year. I believe you can still file as HOH even though you are not claiming her since you maintain a household for a child. However, I am not sure so I will get back to you on this.

yea that is why i was so confused because after reading further on the website about the child tax credit, it did say something about having a qualifying child AND claiming them.

i most definitely checked the box stating i was NOT claiming the child and it was still giving me that child tax credit but NOT the EIC. i removed her as a dependent entirely and it took away that credit obviously. but if i can apply her as a qualifying child but NOT claim her and still receive that credit, obviously i want to do this. thank you so much

and just for the sake of correction: her dad= NOT my husband!
he's just her dad. that is all

 

[GiggleGirl]

quick question:

can i file as HOH even though im not claiming my daughter on my return? she is a qualifying child because she does live with me more than half the year and i pay for more than half of the household and child expenses. it is just her father's year to actually CLAIM her on his taxes....

 

[CPA]

quick question:

can i file as HOH even though im not claiming my daughter on my return? she is a qualifying child because she does live with me more than half the year and i pay for more than half of the household and child expenses. it is just her father's year to actually CLAIM her on his taxes....

What do you mean by it's her father's year to actually claim her? Is this from a divorce decree?

Here is the IRS rule in layman's terms:

Applying this special rule to divorced or separated parents or parents who live apart. If a child is treated as the qualifying child of the noncustodial parent under the rules described earlier for children of divorced or separated parents or parents who live apart, only the noncustodial parent can claim an exemption and the child tax credit for the child. However, the custodial parent, if eligible, or other eligible person can claim the child as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, and the earned income credit. If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules determine which person can treat the child as a qualifying child.

So, yes, it is possible for the father to claim him for the child tax credit, but you can still get the head of household and EIC.

Aren't taxes a joy?

 

[CPA]

well that apparently doesnt seem to be true because on turbotax it states that she is a qualifying child for the child tax credit but she is NOT a qualifying child for the EIC. i have her most of the year and it asks you these questions and even gives information on situations that would make a child qualifying or not for each category.

Okay, Turbotax is either wrong on the EIC issue or your missing something that won't flag you eligible. You might want to try another program to see if you get a different result or go through everything to make sure you checked all the right boxes and such.

 

[udonoogen]

i paid property tax for the first time ever in december 2010. i'm a new homeowner (purchased in 7/2010) and never done this before. is this deductible for this year (2010) or do i have to wait until next (2011)?

also, as someone that bought a home in 2010, is there any reason i should get a tax professional to do my taxes? i've used taxact for the past 4-5 years and it only costs $11.90 for filling both federal/state, so i'm leaning toward sticking with it.

some things that might complicate it:
- homebuyer credits (california and federal)
- property tax (see above question)

everything else stays the same. i really haven't fixed the home that much other than cleaning it up and kind of thinking it's a waste of money for someone with rather uncomplicated taxes (single, unmarried, one mortgage, no school debt, with itemized deductions mostly from giving to church) to use a professional.

 

[EagleKeeper]

i paid property tax for the first time ever in december 2010. i'm a new homeowner (purchased in 7/2010) and never done this before. is this deductible for this year (2010) or do i have to wait until next (2011)?

also, as someone that bought a home in 2010, is there any reason i should get a tax professional to do my taxes? i've used taxact for the past 4-5 years and it only costs $11.90 for filling both federal/state, so i'm leaning toward sticking with it.

some things that might complicate it:
- homebuyer credits (california and federal)
- property tax (see above question)

everything else stays the same. i really haven't fixed the home that much other than cleaning it up and kind of thinking it's a waste of money for someone with rather uncomplicated taxes (single, unmarried, one mortgage, no school debt, with itemized deductions mostly from giving to church) to use a professional.

Stay the path you are on. :thumbsup:

Tax S/W will cover your situation easily.

Taxes paid in Dec 2010 will be claimed on the Schedule A for 2010.
There were also taxes paid in the closing statement that will be claimed for 2010.

Go through the closing statement with a fine tooth comb looking for any reference for government fees or the word tax. Those items are also deductible.

 

[Xcobra]

and just for the sake of correction: her dad= NOT my husband!
he's just her dad. that is all

Sorry about that! I corrected my post.

Also, seems like CPA has answered your HOH question.

 

[CPA]

Sorry about that! I corrected my post.

Also, seems like CPA has answered your HOH question.

You know I missed that. Gigglegirl, if he was not your husband and doesn't provide at least half of her support, why are you letting him claim her for a deduction? I don't mean to pry, just legally, it doesn't seem like you are bound to do so.

 

[Xcobra]

You know I missed that. Gigglegirl, if he was not your husband and doesn't provide at least half of her support, why are you letting him claim her for a deduction? I don't mean to pry, just legally, it doesn't seem like you are bound to do so.

I believe they have an agreement, at least based on her original post (#95). It is the father's year to claim their daughter.

 

[CPA]

I believe they have an agreement, at least based on her original post (#95). It is the father's year to claim their daughter.

Yeah, but I'm wondering the legality surrounding that agreement. If it's not part of a divorce decree, I wonder whether is valid and if she's putting herself in an incorrect position regarding her tax situation.

 

[EagleKeeper]

I believe they have an agreement, at least based on her original post (#95). It is the father's year to claim their daughter.

Yeah, but I'm wondering the legality surrounding that agreement. If it's not part of a divorce decree, I wonder whether is valid and if she's putting herself in an incorrect position regarding her tax situation.

This seems to be the case.

Unless written into a divorce decree, (there may not be one - she has not indicated as such), it can be a battle (for lack of a better word) of who gets the tax benefits.

The IRS prefers that the custodial parent claim the child unless the non-custodial parent is covering more than 50% of the costs.

Splitting up the child's SS # (which would have to be done to claim the different credits/exemptions) will raise a red flag for the IRS.

It would make sense for GG to claim the child fully on her taxes and then cut some type of check to the father for what the difference would be (for the father) had the father claimed the child as an Dependant.

She states that she is doing the other parent's taxes also, so she has those numbers at her fingertips. Because the IRS allows split deposits; she can have the amount that she feels should go to the father, be directly deposited from her refund (assuming she is getting) into his account.

 

[CPA]

This seems to be the case.

Unless written into a divorce decree, (there may not be one - she has not indicated as such), it can be a battle (for lack of a better word) of who gets the tax benefits.

The IRS prefers that the custodial parent claim the child unless the non-custodial parent is covering more than 50% of the costs.

Splitting up the child's SS # (which would have to be done to claim the different credits/exemptions) will raise a red flag for the IRS.

It would make sense for GG to claim the child fully on her taxes and then cut some type of check to the father for what the difference would be (for the father) had the father claimed the child as an Dependant.

She states that she is doing the other parent's taxes also, so she has those numbers at her fingertips. Because the IRS allows split deposits; she can have the amount that she feels should go to the father, be directly deposited from her refund (assuming she is getting) into his account.

That's how I would do it.

 

[Xcobra]

This seems to be the case.

Unless written into a divorce decree, (there may not be one - she has not indicated as such), it can be a battle (for lack of a better word) of who gets the tax benefits.

The IRS prefers that the custodial parent claim the child unless the non-custodial parent is covering more than 50% of the costs.

Splitting up the child's SS # (which would have to be done to claim the different credits/exemptions) will raise a red flag for the IRS.

It would make sense for GG to claim the child fully on her taxes and then cut some type of check to the father for what the difference would be (for the father) had the father claimed the child as an Dependant.

She states that she is doing the other parent's taxes also, so she has those numbers at her fingertips. Because the IRS allows split deposits; she can have the amount that she feels should go to the father, be directly deposited from her refund (assuming she is getting) into his account.

This is truly interesting. We'll have to see what she says to the above.

 

[olds]

My wife has a business that I am not listed on.
I bought some stuff for her business on an credit card that she is not listed on.
We pay the card off from our joint account.
Can she still write it off?

TIA

 

[EagleKeeper]

My wife has a business that I am not listed on.
I bought some stuff for her business on an credit card that she is not listed on.
We pay the card off from our joint account.
Can she still write it off?

TIA

Have her keep the paper receipts - that is what will count.

 

[tw33ter]

I claimed my mom as my dependent on my '09 tax return, but I'm not sure if I can for '10. My father died in Dec '09 so my mom started receiving survivors' benefits(her only source of income besides what she got from his life insurance) in Jan '10. Can I (head of household) claim her as a dependent again for '10? Also, will she need to file taxes for her survivors' benefits and what she got from his life insurance?

 

[EagleKeeper]

I claimed my mom as my dependent on my '09 tax return, but I'm not sure if I can for '10. My father died in Dec '09 so my mom started receiving survivors' benefits(her only source of income besides what she got from his life insurance) in Jan '10. Can I (head of household) claim her as a dependent again for '10? Also, will she need to file taxes for her survivors' benefits and what she got from his life insurance?

Insurance proceeds do not count as income for tax purposes.

Survivor Benefits will have to be handled the same way the benefits were be done by your Father previously.

If you are providing more than 50% of her support in one way or another, then you can claim her as an dependant for Head of Household.

 

[CPA]

My wife has a business that I am not listed on.
I bought some stuff for her business on an credit card that she is not listed on.
We pay the card off from our joint account.
Can she still write it off?

TIA

How are you doing taxes? Is this a corporation or a Schedule C sole proprietorship?

 

[EagleKeeper]

I expect that is will be a Schedule C hung off of a joint 1040 until the business grows well enough that he can retire on a CA state Pension :hmm:

 

[Homerboy]

My wife has a business that I am not listed on.
I bought some stuff for her business on an credit card that she is not listed on.
We pay the card off from our joint account.
Can she still write it off?

TIA

right or wrong, I have to admit I do this quite a bit for my wife's business.
Interested in the answer(s).

 

[EagleKeeper]

right or wrong, I have to admit I do this quite a bit for my wife's business.
Interested in the answer(s).

Joint filing allows combining of income and expenses

 

[Homerboy]

Joint filing allows combining of income and expenses

Ah.
So even though we will on occasion use a personal CC (or even debit card) for her business related purposes, since we are filing jointly and her business is a sole proprietorship (schedule Cs and all that), I'm good to go? Cool.

 

[EagleKeeper]

Ah.
So even though we will on occasion use a personal CC (or even debit card) for her business related purposes, since we are filing jointly and her business is a sole proprietorship (schedule Cs and all that), I'm good to go? Cool.

Yes, your income is also considered to be hers (typical in any marriage).

But the IRS also thinks her income can be considered to be yours (not typical in any marriage :hmm

The same goes for items for any of the Schedules - both income and expenses.


Dig deep for indirect expenses for the business - many exist - some have been identified in previous tax threads. The IRS will give you some hints via the Schedule C, but you have a better idea of how money is spent to support the business other than direct purchases/expense.