Calling FBG tax guys - Single parent tax question (1 Viewer)

[coyote5]

I got divorced in 2014 and have joint custody of my 7 year old son. Placement is 50/50. We agreed that we will alternate who claims him for tax purposes year to year. 2014 is my year to claim him.

I filed as head of household and completed my taxes yesterday through TaxAct and everything was fine until I submitted. Both Federal and State were rejected because my ex claimed her portion of childcare paid for the childcare credit. I claimed my share on my return as well.

My questions -

1. Can one single parent claim the child for the exemption and the other single parent report the childcare costs (their portion only)? I understand that both parents cannot report their respective childcare costs but I'm unclear as to whether one can claim as a dependent and the other can claim the costs. It doesn't seem like you could.

2. In my 50/50 placement situation will we need to file form 8332 in alternating years to release claim to the dependency exemption? Or as long as only one of us claims him will the IRS not care?

3. Can only one of us claim head of household each year? I believe one of the tests for that status is that the child lived in the household for over half the year. So it seems like the parent claiming the dependent is the one who claims HoH...

Is there anything else I'm missing? After typing this all out I'm wondering if we need to sit down with a tax professional to plan out tax strategy long term as we alternate years.

 

[eoMMan]

You can't claim child care if you don't have a dependent. My guess is your ex filed first and claimed the kid.

 

[VA703]

I have a question, looking for some advice.

Married with 1 child.

I claim 1 wife claims 0

we are expecting this august

should I claim 2 now or wait until child is born

 

[Gawain]

I have a question, looking for some advice.

Married with 1 child.

I claim 1 wife claims 0

we are expecting this august

should I claim 2 now or wait until child is born

Assuming that you're referencing updating your W-4 with your employer, you can update now. The benefit of the increased number of dependents will encompass all of 2015.

If you're referencing claiming the unborn child on your 2014 taxes, you can't do that.

ETA: You can put almost anything you want on a W4.

 

[Tennessee_ATO]

You'll be able to claim child #2 for all of 2015 -- even if he/she is born on 12/31. I'm not aware of any basis to claim an unborn fetus as a dependent in 2014 though.

ETA: Just saw Gawain's post. Wasn't thinking about the W-4, was thinking about the 1099. Duh. My bad.

 

[saintfool]

You can't claim child care if you don't have a dependent. My guess is your ex filed first and claimed the kid.

likely correct.

i had this same thing with my ex last year. we had to lay out the protocol for tax purposes in our divorce agreement.

 

[BobbyLayne]

To the OP re: Form 8332

https://turbotax.intuit.com/tax-tools/tax-tips/IRS-Tax-Forms/What-is-Form-8332--Release-Revocation-of-Release-of-Claim-to-Exemption-for-Child-by-Custodial-Parent/INF26050.html

Give it to her to file the years she is taking it, complete part III and file with your return the years you are taking it back.

 

[VA703]

I have a question, looking for some advice.

Married with 1 child.

I claim 1 wife claims 0

we are expecting this august

should I claim 2 now or wait until child is born

Assuming that you're referencing updating your W-4 with your employer, you can update now. The benefit of the increased number of dependents will encompass all of 2015.

If you're referencing claiming the unborn child on your 2014 taxes, you can't do that.

ETA: You can put almost anything you want on a W4.

yes the W-4 is what I was referring. Just wanted to avoid owing any back taxes. I broke even this year so I feel going 2 should be the same with 2 kids

 

[Tennessee_ATO]

I have a question, looking for some advice.

Married with 1 child.

I claim 1 wife claims 0

we are expecting this august

should I claim 2 now or wait until child is born

Assuming that you're referencing updating your W-4 with your employer, you can update now. The benefit of the increased number of dependents will encompass all of 2015.

If you're referencing claiming the unborn child on your 2014 taxes, you can't do that.

ETA: You can put almost anything you want on a W4.

yes the W-4 is what I was referring. Just wanted to avoid owing any back taxes. I broke even this year so I feel going 2 should be the same with 2 kids

If you want to avoid owing anything, don't claim the 2nd child at all. The gub-mint will withhold more during the year.

 

[VA703]

I have a question, looking for some advice.

Married with 1 child.

I claim 1 wife claims 0

we are expecting this august

should I claim 2 now or wait until child is born

Assuming that you're referencing updating your W-4 with your employer, you can update now. The benefit of the increased number of dependents will encompass all of 2015.

If you're referencing claiming the unborn child on your 2014 taxes, you can't do that.

ETA: You can put almost anything you want on a W4.

yes the W-4 is what I was referring. Just wanted to avoid owing any back taxes. I broke even this year so I feel going 2 should be the same with 2 kids

If you want to avoid owing anything, don't claim the 2nd child at all. The gub-mint will withhold more during the year.

I want to avoid the free loan while earning as much as possible throughout the year.

maybe ill wait till june to claim 2

 

[coyote5]

To the OP re: Form 8332

https://turbotax.intuit.com/tax-tools/tax-tips/IRS-Tax-Forms/What-is-Form-8332--Release-Revocation-of-Release-of-Claim-to-Exemption-for-Child-by-Custodial-Parent/INF26050.html

Give it to her to file the years she is taking it, complete part III and file with your return the years you are taking it back.

But the IRS doesn't know which parent the child spent the majority of the year with...so really we should just know that we need to file one each year even if we agree who will be claiming the child each year?

 

[BobbyLayne]

To the OP re: Form 8332

https://turbotax.intuit.com/tax-tools/tax-tips/IRS-Tax-Forms/What-is-Form-8332--Release-Revocation-of-Release-of-Claim-to-Exemption-for-Child-by-Custodial-Parent/INF26050.html

Give it to her to file the years she is taking it, complete part III and file with your return the years you are taking it back.

But the IRS doesn't know which parent the child spent the majority of the year with...so really we should just know that we need to file one each year even if we agree who will be claiming the child each year?

Who had the kid the majority of nights doesn't matter, because the requirement can be waived. I think I only filled out the 8332 once, and my ex- files the a copy of the original each year (we don't flip flop who takes the personal exemption).

Custodial parent releases claim on Form 8332For tax filing purposes, having custody is not necessarily the same as it is for a divorce decree. While a divorce decree can state that one parent has custody of a child, the requirement for the IRS generally depends on which parent the child lived with for the greater number of nights.

If you have custody of your child, but want to release the right to claim your child's exemption to the noncustodial parent you’ll need to fill out Form 8332. All that’s needed is your child's name, the tax year, your Social Security number, then your signature and date. If you prefer to release your claim to your child's exemption for more than one tax year, enter the same information in part two rather than part one. Once complete, give the form to your child's noncustodial parent, not the IRS. They will file it with their tax return. If you release your claim for multiple tax years, you only need to fill out the form once: the other parent will attach copies of the original to their return each year.
Noncustodial parent must be eligibleThe child's noncustodial parent must be eligible to claim the child as a dependent to take the exemption. The rules for claiming a dependent usually require the parent to live with the child for more than half the year. This rule can be waived when the parents are divorced, separated or live apart from each other. For this waiver to apply, more than half of the money needed to support your child must come from you and the noncustodial parent. In addition, your child must not live with anyone other than you and the noncustodial parent for more than six months of the year. Therefore, if your child's noncustodial parent isn't eligible, giving them a completed Form 8332 doesn't change the fact that they can't claim the child.

 

[Pipes]

I got divorced in 2014 and have joint custody of my 7 year old son. Placement is 50/50. We agreed that we will alternate who claims him for tax purposes year to year. 2014 is my year to claim him.

I filed as head of household and completed my taxes yesterday through TaxAct and everything was fine until I submitted. Both Federal and State were rejected because my ex claimed her portion of childcare paid for the childcare credit. I claimed my share on my return as well.

My questions -

1. Can one single parent claim the child for the exemption and the other single parent report the childcare costs (their portion only)? I understand that both parents cannot report their respective childcare costs but I'm unclear as to whether one can claim as a dependent and the other can claim the costs. It doesn't seem like you could.

2. In my 50/50 placement situation will we need to file form 8332 in alternating years to release claim to the dependency exemption? Or as long as only one of us claims him will the IRS not care?

3. Can only one of us claim head of household each year? I believe one of the tests for that status is that the child lived in the household for over half the year. So it seems like the parent claiming the dependent is the one who claims HoH...

Is there anything else I'm missing? After typing this all out I'm wondering if we need to sit down with a tax professional to plan out tax strategy long term as we alternate years.

You can claim child care expenses without claiming dependency...see below right out of Publication 503

Child of divorced or separated parents or parents liv-ing apart. Even if you cannot claim your child as a de-pendent, he or she is treated as your qualifying person if:

　

The child was under age 13 or was not physically or mentally able to care for himself or herself,

The child received over half of his or her support dur-ing the calendar year from one or both parents who are divorced or legally separated under a decree of di-vorce or separate maintenance, are separated under a written separation agreement, or lived apart at all times during the last 6 months of the calendar year,

The child was in the custody of one or both parents for more than half the year, and

You were the child's custodial parent.

Typically the child care expense goes with the parent who gets the dependent deduction but it doesn't have too. Since she filed first she beat you to the punch. Looks like you'll either have to remove your child care and not get the credit or file a paper return and wait 3 months for your refund.

 

[coyote5]

I got divorced in 2014 and have joint custody of my 7 year old son. Placement is 50/50. We agreed that we will alternate who claims him for tax purposes year to year. 2014 is my year to claim him.

I filed as head of household and completed my taxes yesterday through TaxAct and everything was fine until I submitted. Both Federal and State were rejected because my ex claimed her portion of childcare paid for the childcare credit. I claimed my share on my return as well.

My questions -

1. Can one single parent claim the child for the exemption and the other single parent report the childcare costs (their portion only)? I understand that both parents cannot report their respective childcare costs but I'm unclear as to whether one can claim as a dependent and the other can claim the costs. It doesn't seem like you could.

2. In my 50/50 placement situation will we need to file form 8332 in alternating years to release claim to the dependency exemption? Or as long as only one of us claims him will the IRS not care?

3. Can only one of us claim head of household each year? I believe one of the tests for that status is that the child lived in the household for over half the year. So it seems like the parent claiming the dependent is the one who claims HoH...

Is there anything else I'm missing? After typing this all out I'm wondering if we need to sit down with a tax professional to plan out tax strategy long term as we alternate years.

You can claim child care expenses without claiming dependency...see below right out of Publication 503

Child of divorced or separated parents or parents liv-ing apart. Even if you cannot claim your child as a de-pendent, he or she is treated as your qualifying person if:

　

The child was under age 13 or was not physically or mentally able to care for himself or herself,

The child received over half of his or her support dur-ing the calendar year from one or both parents who are divorced or legally separated under a decree of di-vorce or separate maintenance, are separated under a written separation agreement, or lived apart at all times during the last 6 months of the calendar year,

The child was in the custody of one or both parents for more than half the year, and

You were the child's custodial parent.

Typically the child care expense goes with the parent who gets the dependent deduction but it doesn't have too. Since she filed first she beat you to the punch. Looks like you'll either have to remove your child care and not get the credit or file a paper return and wait 3 months for your refund.

Unpack this for me... why would filing a paper return allow me to claim my portion of the day care if she has already claimed her portion? Is this not asking for an audit?

 

[Pipes]

I got divorced in 2014 and have joint custody of my 7 year old son. Placement is 50/50. We agreed that we will alternate who claims him for tax purposes year to year. 2014 is my year to claim him.

I filed as head of household and completed my taxes yesterday through TaxAct and everything was fine until I submitted. Both Federal and State were rejected because my ex claimed her portion of childcare paid for the childcare credit. I claimed my share on my return as well.

My questions -

1. Can one single parent claim the child for the exemption and the other single parent report the childcare costs (their portion only)? I understand that both parents cannot report their respective childcare costs but I'm unclear as to whether one can claim as a dependent and the other can claim the costs. It doesn't seem like you could.

2. In my 50/50 placement situation will we need to file form 8332 in alternating years to release claim to the dependency exemption? Or as long as only one of us claims him will the IRS not care?

3. Can only one of us claim head of household each year? I believe one of the tests for that status is that the child lived in the household for over half the year. So it seems like the parent claiming the dependent is the one who claims HoH...

Is there anything else I'm missing? After typing this all out I'm wondering if we need to sit down with a tax professional to plan out tax strategy long term as we alternate years.

You can claim child care expenses without claiming dependency...see below right out of Publication 503

Child of divorced or separated parents or parents liv-ing apart. Even if you cannot claim your child as a de-pendent, he or she is treated as your qualifying person if:

　

The child was under age 13 or was not physically or mentally able to care for himself or herself,

The child received over half of his or her support dur-ing the calendar year from one or both parents who are divorced or legally separated under a decree of di-vorce or separate maintenance, are separated under a written separation agreement, or lived apart at all times during the last 6 months of the calendar year,

The child was in the custody of one or both parents for more than half the year, and

You were the child's custodial parent.

Typically the child care expense goes with the parent who gets the dependent deduction but it doesn't have too. Since she filed first she beat you to the punch. Looks like you'll either have to remove your child care and not get the credit or file a paper return and wait 3 months for your refund.

Unpack this for me... why would filing a paper return allow me to claim my portion of the day care if she has already claimed her portion? Is this not asking for an audit?

Not an audit per se but as the non-dependent claiming spouse she would have to prove that she was the custodial parent meaning she provided over half your child's support amongst other things. If she can't prove that then the child care credit belongs to you. She basically made an error and you'd be pointing that out to the IRS. I don't do tax returns anymore but that likely means she'd receive an adjustment letter from the IRS with an additional tax assessment and interest and penalties. She would have 30 days or something like that to prove she was the custodial parent. You'd basically be a pain in the ### for her on this if you go that route. You'd get your credit at some point when this all shakes out but it would hold things up for a few months. I'm not sure how large your credit is but it may not be worth it.