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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
2OR Tri-County Training 2014
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
3OR Tri-County Training 2014
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
NTTC Training – TY 2014
Pub 17 Ch 2
4OR Tri-County Training 2014
Form 1040
NTTC Training – TY 2014
5OR Tri-County Training 2014
Intake/Interview Sheet
NTTC Training – TY 2014
Check Part II entries on Intake Sheet
Ask questions – verify
6OR Tri-County Training 2014
Single
Not married as of December 31st
Married, but legally separated No dependent children at home
NTTC Training – TY 2014
7OR Tri-County Training 2014
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
NTTC Training – TY 2014
8OR Tri-County Training 2014
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
NTTC Training – TY 2014
9OR Tri-County Training 2014
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
NTTC Training – TY 2014
10OR Tri-County Training 2014
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
NTTC Training – TY 2014
11OR Tri-County Training 2014
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
NTTC Training – TY 2014
12OR Tri-County Training 2014
Turn to the Decision Tree
NTTC Training – TY 2014
Back of QC/QRTrifold and
Pub 4012Page B-1
13OR Tri-County Training 2014
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
NTTC Training – TY 2014
14OR Tri-County Training 2014
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
15OR Tri-County Training 2014
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
Oregon Tri-County Training – 2013
16OR Tri-County Training 2014
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
Oregon Tri-County Training – 2013
17OR Tri-County Training 2014
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!
Oregon Tri-County Training – 2013
18OR Tri-County Training 2014
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
Oregon Tri-County Training – 2013
19OR Tri-County Training 2014
Tests to be a Qualifying Child
Relationship test Age-Student-Disability test Residency test Support test Entitlement test
Pub 4012 – page C-3
Oregon Tri-County Training – 2013
20OR Tri-County Training 2014
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
Oregon Tri-County Training – 2013
21OR Tri-County Training 2014
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)
Oregon Tri-County Training – 2013
22OR Tri-County Training 2014
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
Oregon Tri-County Training – 2013
23OR Tri-County Training 2014
Follow the arrows
If the answer to the question in Box 1 is “yes,” follow the yes arrow to Box 3.
Oregon Tri-County Training – 2013
24OR Tri-County Training 2014
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
Oregon Tri-County Training – 2013
25OR Tri-County Training 2014
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
Oregon Tri-County Training – 2013
26OR Tri-County Training 2014
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
Oregon Tri-County Training – 2013
27OR Tri-County Training 2014
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)
NTTC Training – TY 2014
Pub 4012 pg C-4
Pub 17 pg 234
28OR Tri-County Training 2014
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
NTTC Training – TY 2014
29OR Tri-County Training 2014
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
NTTC Training – TY 2014
30OR Tri-County Training 2014
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)
NTTC Training – TY 2014
31OR Tri-County Training 2014
Child of Separated 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
NTTC Training – TY 2014
32OR Tri-County Training 2014
Child of Separated Parents
Non-custodial parent can claim: Dependency exemption Child tax credit Education credits Medical expenses that he or she paid
NTTC Training – TY 2014
33OR Tri-County Training 2014
Child of Separated Parents
Custodial parent can claim: Head of household filing status Dependent care credit Earned income credit Medical expenses that he or she paid
NTTC Training – TY 2014
34OR Tri-County Training 2014
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