Apparently I have two tax questions this year
This question concerns how the gross income test works as it relates to a qualifying person for head of household.
IRS Pub 501 states in the relevant part: "Gross income is all income in the form of money, property, and services that isn't exempt from tax."
Assume a taxpayer wants to file Head of Household. The taxpayer has a relative who earned W-2 income of $4,050 and meets all of the relevant criteria to be a qualifying person. The relative has no other income.
If taxpayer contributes $100 to a traditional IRA for the relative, does the relative now fully qualify as a qualifying person?
In other words, can one construe that the traditional IRA contribution makes $100 of the W-2 income exempt from tax and thus no longer included in gross income?
Thanks in advance!
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.