So Cal Mobile Tax Prep
Find me on:
  • Home
  • Services & Benefits
  • Contact
  • SCMTP Blog
  • FAQ
  • CLIENT PORTAL

Claiming the Kids - Tricky situations

1/18/2011

Comments

 
The longer I do taxes, the more often I see this situation.  Separated parents who both want to claim their children.  While parents are always entitled to claim their children, it sometimes happens that they would like to allow someone other than the other parent to claim the child.  While not illegal if all the rules are followed properly, many people assume that if the child doesn't live with the other parent, they cannot claim them.  This is not true.

A parent is always allowed to claim their child regardless of the living arrangements.  However, only one parent can claim the child at a time.  The IRS has tie-breaker rules for these situations. 1. Parent with whom the child lived with longer, 2. If time spent with parents is evenly divided it then goes to the parent with the highest Adjusted Gross Income (usually parent with the higher income, but not always).

Now, if neither parent can claim the child, then the person with the highest AGI may claim the child.  If two sets of grandparents would like to claim the same child, tie-breaker rule #2 applies.

Another sticky situation is live-in boyfriend/girlfriends.  If the parent lives with a partner and is not going to claim their child, they first need to determine whether the non-custodial parent is going/able to claim the child before offering to allow their partner to claim the child.  And since that person is not directly related to the child they will be limited as to which credits they are entitled to.


Of course, you can always come to an agree with the other parent to try to avoid these situations.
Comments

Are you ready?

1/7/2011

Comments

 
Tax season has officially started for many retail tax prep outlets (H & R, etc.) and individual preparers.  E-file opens on Friday, Jan 14 and most preparers are getting their offices in organized and ready to file your taxes.  But, are you ready?  I know April 15 (this year its April 18), seems sooo far away, but as we all know it sneaks up on you.  Here are a few things you should do before you visit your tax preparer:

1. If you worked more than 1 job during 2010, be sure you have W2s from all employers.

2. If you started your own business in 2010, be sure you have a record of all income, expenses and miles driven.  Also, keep receipts (for the IRS, not your preparer).

3. If you have a mortgage, have your 1098 Mortgage Interest and Property Tax bill with you.

4. If you (or children) attended a college during 2010, be sure to have a record of all expenses paid.  Including any paid by a scholarship, grant or student loan.  You may have also received 1098-T from your school.

5. If you have started repaying your student loans, the interest is deductible.  Be sure to have your 1098-E from your bank handy.  This form has the amount of student loan interest paid during the year.

6. For those of you with children:
  • under age 13: amounts paid for child care are deductible.  Have your care provider give you a written statement with their tax identification number and the amount you paid for 2010.
  • under age 17: these kids still qualify for the child tax credit (up to $1000/per).
  • under age 19: provided you fall into the income limits, they will qualify you for the earned income credit.
  • under age 24: although they have been adults for awhile, if you are paying for their higher education expenses, you either deduct or receive a tax credit.  Be sure to read #4 & #5.
Well that covers most tax payers.  However, the IRS has not finished the Schedule A (itemized deductions) or the education credits, so tax payers with these items will not be able to file until the IRS has finalized the forms and releases the updates to your preparer.  That said, there is no reason you still shouldn't see your preparer as early as possible.  If you are entitled to a refund, your preparer can file your taxes on the first day available.  If you are going to owe taxes, at least you will know how much and have approximately 4 months to pay.

As always, please leave a comment or question.
Comments

      To Stay up to day on important tax information all year subscribe to our monthly newsletter.

    Subscribe to Newsletter

    Archives

    January 2018
    November 2017
    September 2017
    August 2017
    July 2017
    June 2017
    January 2017
    December 2016
    November 2016
    October 2016
    January 2015
    August 2013
    March 2013
    January 2013
    November 2012
    September 2012
    August 2012
    April 2012
    January 2012
    February 2011
    January 2011
    December 2010

    RSS Feed