SecondCor521
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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!
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!