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Apparently I have two tax questions this year
Old 04-12-2016, 11:15 PM   #1
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Apparently I have two tax questions this year

Hi all,

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!
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Old 04-13-2016, 12:21 AM   #2
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I'm guessing no.....one would hope there is some consistency in terminology.
The 1040 https://www.irs.gov/pub/irs-pdf/f1040.pdf has a gross income associated with it after TIRA deduction (line 32) but it is AGI (Adjusted Gross Income)(line 37),not gross income.
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Old 04-13-2016, 12:30 AM   #3
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Quote:
Originally Posted by kaneohe View Post
I'm guessing no.....one would hope there is some consistency in terminology.
The 1040 https://www.irs.gov/pub/irs-pdf/f1040.pdf has a gross income associated with it after TIRA deduction (line 32) but it is AGI (Adjusted Gross Income)(line 37),not gross income.
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Old 04-13-2016, 08:06 AM   #4
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+2 my view would be that gross income is line 22.

You could confirm or refute by putting the situation into TT with and without the IRA contribution and see if the status changes to HH or not.
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Old 04-13-2016, 11:46 AM   #5
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Yeah, I think y'all are correct. Thanks. Sigh.
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