Head of Household Status

[Marshac]

This is a continuation of a previous thread.

So I have established that I CAN claim my fiance as a dependant. The next question is... can I now file as Head of Household since I have a dependant?

From publication 501, it LOOKS like I can.... which would be freaking awesome.

 

[Cut-Throat]

Marshac,

I'd get a Tax Professional. There may be some other things that you are overlooking. Mine has saved me a bundle over the years.

I don't do my own dentistry and I don't do my own taxes!

 

[cute fuzzy bunny]

I believe the dependent needs to be your child or a qualifying relative, and not be your spouse, for you to qualify as head of household.

In short, no, I dont think you can.

 

[Marshac]

When a tax system is so complex and poorly documented that an average person needs a tax professional to make sense of it all, something is wrong.

Having said that... i'm going to do this one myself.

 

[Sheryl]

Marshac -
I looked into that about 6-7 years ago and figured I could not do it. I didn't ask a professional and that may have changed in the meantime. But it was pretty clear after reading the description that even though I was supporting him, I couldn't claim it.

Don't remember why, now. Sorry.

 

[MasterBlaster]

In Publication 501 that you posted a link to there is a table (table 4) that shows Who Is a Qualifying Person for Filing as Head of Household?

Based on Table 4 it looks like you can't use this particular loophole. Keep looking though !

Maybe if you adapted your Fiancee it would work. But then you couldn't marry her cause you can't marry your daughter (except in Arkansas).

 

[Marshac]

I still think I can be HoH...

From 501-

You are unmarried or “considered unmarried” on the last day of the year.

You paid more than half the cost of keeping up a home for the year.

A “qualifying person” lived with you in the home for more than half the year (except for temporary absences, such as school). However, if the “qualifying person” is your dependent parent, he or she does not have to live with you. See Special rule for parent, later, under Qualifying Person.

Unmarried. Check.

Paid for >50%. Check.

Qualifying person.

Qualifying Person
See Table 4 to see who is a qualifying person.

Any person not described in Table 4 is not a qualifying person.

And table 4 says-

IF the person is your . . . ANDThen that person is...
qualifying relative 4 other than your father or mother (such as a grandparent, brother, or sister who meets certain tests) 6
he or she lived with you more than half the year, and you can claim an exemption for him or her 7
a qualifying person.



Note (4) Says: "The term “qualifying relative” is defined under Exemptions for Dependents, later. "

Ok so far... using the table, it leads me to "qualifying person", assuming that my fiance is a "qualifying person" as described below (as per note 4)-

Exemptions for Dependents

"Beginning in 2005, the term “dependent” means:

A qualifying child, or

A qualifying relative."

Ok, so far so good.... new tax rules. I like. So if either of those fit, i'm set.

Tests To Be a Qualifying Relative

The person cannot be your qualifying child or the qualifying child of anyone else.


The person either (a) must be related to you in one of the ways listed under Relatives who do not have to live with you, or (b) must live with you all year as a member of your household.


The person's gross income for the year must be less than $3,200.


You must provide more than half of the person's total support for the year.

All check. I think i'm HoH according to the new 2005 regs. No adoption necessary. 

 

[wabmester]

What about dogs? Is there anything in there about the dependent needing to be human?

 

[Marshac]

What about dogs?   Is there anything in there about the dependent needing to be human?

As long as the dog has a tax ID number you can claim...

 

[wabmester]

Head of Household Filing Status — A taxpayer is eligible for head of household filing status only with respect to a qualifying child or the taxpayer’s dependent. But the taxpayer cannot file as head of household for a person who is a dependent only because he or she lived with the taxpayer for the whole year or because the taxpayer may claim him or her as a dependent under a multiple support agreement.

http://www.irs.gov/newsroom/article/0,,id=133298,00.html

 

[cute fuzzy bunny]

Uh Marshac, look at that table again. Unless your fiancee is a relative, she doesnt qualify. Unless *I'm* missing something.

If your fiancee is your relative, I'm sorry. I thought you lived in WA, not AK...

 

[Marshac]

Uh Marshac, look at that table again.  Unless your fiancee is a relative, she doesnt qualify.  Unless *I'm* missing something.

The english definition of "relative" is different than the IRS' "qualifying relative" definition. In my previous post I listed out the ONLY requirements the IRS places on someone becoming a "qualifying relative"

It's all relative I guess. Sorry. Couldn't resist.

I'm gonna keep poking around. I'll keep you guys posted.

Martha- any thoughts?


Edit: I found this- Tax Law Changes for Individuals Tax Year 2005

In general, you can use head of household filing status only if, as of the end of the year, you were unmarried or " considered unmarried" and you paid over half the cost of keeping up a home:

1. That was the main home for all the entire year of your parent whom you can claim as a dependent (your parent did not have to live with you), or

2 In which you lived for more than half of the year with either of the following:
a. Your qualifying child (defined earlier, but without regard to the exception for children of divorced or separated parents). But, if your qualifying child is married at the end of the year, see Married child below.

b. Any other person whom you can claim as a dependent.

I have #2b. I think i'm all set

 

[Marshac]

But the taxpayer cannot file as head of household for a person who is a dependent only because he or she lived with the taxpayer for the whole year

This is worrysome... However, I would argue that she not only lived me for the whole year, but I ALSO provided more than 50% of her support..... I need to look at more stuff.

Edit

Ok. I give up. As wab pointed out

"must live with you all year as a member of your household." and this is what qualified her as my dependant in the first place, so if the IRS excludes this possibility (as per a footnote), no dice for me

 

[maddythebeagle]

yeah, I dont see anything beyond having the dependent having to be a relative, but martha would know since she hit one of the tax classes recently.

If you are going to itemize head of household doesn’t get you much anyway (some of the tax brackets are lowered).

 

[cute fuzzy bunny]

I'm guessing TH, that you meant AR (Arkansas) not AK (Alaska) - You might have meant Alaska but Arkansas is funnier!

Shoot, I did, but i'll bet its tough to get a date in alaska too...

 

[kaneohe]

I think I agree with Wab on this one. From Pub. 4012 which is the 2005 Volunteer Resource Guide (essentially a collection for "cheat sheets"/flow charts of key decision making processes)
there is the same qualification as a footnote:
*you can not use HOH filing status based on any person who is your dependent only because he or she lived with you for all of 2005.

The corresponding flowchart although not specifically spelling it out as exclusively these seems to be looking for some type of relative:
other relatives include grandparents, siblings, step-siblings, half-siblings,step-parents, in-laws, and if related by blood--uncles,aunts, nephews, nieces

 

[bosco]

As long as the dog has a tax ID number you can claim...

I think Arnold Ziffle, Fred Ziffle's pig on Green Acres had a tax ID number. I know for sure he had a selective service number because he got drafted in one episode....bet Fred claimed him on his taxes, if he filed at all.

 

[sgeeeee]

I think Arnold Ziffle, Fred Ziffle's pig on Green Acres had a tax ID number.  I know for sure he had a selective service number because he got drafted in one episode....bet Fred claimed him on his taxes, if he filed at all. 

I think everyone would want tax advice from Fred Ziffle. Someone should start a tax service called Fred Ziffle tax consultants and set up next to H&R Block.

 

[Nords]

Ok. I give up.

Marchac, I agree with your logic and applaud your persistence-- and I feel your pain, man.

I spent weeks researching a tax issue to its conclusion using superior logic & published IRS guidelines.

When I did a last-minute check before execution, my BIL the CPA blew me out of the water on his instincts (and backed those up with an hour's research of tax court precedents).

So don't feel bad about spending all that research time, the IRS would have made up its own mind independently of the rules & facts. I think they call it "policy".

(http://early-retirement.org/forums/index.php?topic=2510.msg79453#msg79453)

 

[Martha]

From Martha's textbook of how to deal with the IRS: If two publications/letters from the IRS seem to say contradictory things, then you better look at the statutes and regulations. When will the IRS learn to write!

Here is the applicable regulation: http://tinyurl.com/acua9

The pertinant language:

(ii) Any other person who is a dependent of the taxpayer, if the
taxpayer is entitled to a deduction for the taxable year for such person
under section 151 and paragraphs (3) through (8 ) of section 152(a) and
the regulations thereunder. Under section 151 the taxpayer may be
entitled to a deduction for any of the following persons:
(a) His brother, sister, stepbrother, or stepsister;
(b) His father or mother, or an ancestor of either;
(c) His stepfather or stepmother;
(d) A son or a daughter of his brother or sister;
(e) A brother or sister of his father or mother; or
(f) His son-in-law, daughter-in-law, father-in-law, mother-in-law,
brother- in-law, or sister-in-law;

if such person has a gross income of less than the amount determined
pursuant to Sec. 1.151-2 applicable to the calendar year in which the
taxable year of the taxpayer begins, if the taxpayer supplies more than
one-half of the support of such person for such calendar year and if
such person does not make a joint return with his spouse for the taxable
year beginning in such calendar year. The taxpayer may not be considered
to be a head of a household by reason of any person for whom a deduction
is allowed under section 151 only by reason of sections 152 (a)(9), 152
(a)(10), or 152(c) (relating to persons not related to the taxpayer,
persons receiving institutional care, and persons covered by multiple
support agreements).

 

[cute fuzzy bunny]

Clear as mud. Still sounds like she has to be some sort of relative for this to not become a red flag, yes?

 

[Nords]

Clear as mud.  Still sounds like she has to be some sort of relative for this to not become a red flag, yes?

Hey, Marshac, maybe you shouldn't get married after all-- just adopt her!

 

[HFWR]

Woody Allen?

 

[cute fuzzy bunny]

Well look at it this way...if he marries her sister, she becomes his sister in law, and that'd be legal.

I think I saw a movie with that plot line too...lemme think about it a minute...

 

[Martha]

Clear as mud.

So, in IRS speak, Marshac can claim his GF as a dependent because she is a "qualifying relative" even though she is not related to him. And in IRS speak, he cannot be head of household because she is not a "qualifying person" because she is not a relative.