Tax Dep., Filing Status, Child Care expenses, Tax Credit

[Groundhogday]

I'm having a different read of the IRS policy. 8332 provides for resolving one of the OP's ingredients for HOH.

Not sure I get this reasoning since the existence and filing of a form 8332 is a giant red flag to the IRS that you are not able to claim HOH for that child. The fact that you needed a form 8332 means that you did not meet the IRS requirements of custodial parent for that child, so you don't qualify for HOH.

Again my understanding of the 8332 is so that one can claim a child for an exemption. Grgr might chime in more but this is my understanding of reading the IRS Pub 501. The 8332 is just for the exemption only. It doesn't mean one way or the other if a person can file using HoH however it does mean one can claim a child/ren for exemption. Maybe I'm misreading the reply...sorry a little tired and stressed out with what is going on in my life currently.

This is correct, f8332 is for the exemption only.

There is no way to write into a decree who gets to claim HoH. As many have pointed out, this is strictly based upon who has the child for the majority of overnights. However, if your parenting plan states explicitly that you have child A a majority of overnights and your wife has child B a majority of overnights, then someone is going to have to work hard to document to the contrary.

[grgr]

Again my understanding of the 8332 is so that one can claim a child for an exemption. Grgr might chime in more but this is my understanding of reading the IRS Pub 501. The 8332 is just for the exemption only. It doesn't mean one way or the other if a person can file using HoH however it does mean one can claim a child/ren for exemption. Maybe I'm misreading the reply...sorry a little tired and stressed out with what is going on in my life currently.

This is correct, f8332 is for the exemption only.

There is no way to write into a decree who gets to claim HoH. As many have pointed out, this is strictly based upon who has the child for the majority of overnights. However, if your parenting plan states explicitly that you have child A a majority of overnights and your wife has child B a majority of overnights, then someone is going to have to work hard to document to the contrary.

I agree with this. The only thing I'd add is to say the IRS does have forms they routinely send out pertaining to people who claim a dependent, HH or the EIC and these forms request you provide very specific info such as school records, medical records, etc showing the home address of the child. Single parents and non-parents (claiming a child not their own) are the main target of these requests and yes, single males draw more attention thein single moms.

I would not send documents with the return that are not required or requested.

[hoosier_dad]

The only thing I'd add is to say the IRS does have forms they routinely send out pertaining to people who claim a dependent, HH or the EIC and these forms request you provide very specific info such as school records, medical records, etc showing the home address of the child. Single parents and non-parents (claiming a child not their own) are the main target of these requests and yes, single males draw more attention thein single moms.

I'm assuming these letters only go out when there is a conflict between two tax returns, both claim same dependent or both claiming HOH? I'm a little concerned about the IRS using home address to prove custodial rights for a given year. I'm considered non-primary in my state yet with 50/50 parenting time the parent with more overnights will fluctuate based on Holidays each year.

[MarylandDadom]

Thanks for the replies...a couple of comments"

1. Because the wife and I have lived apart for more than the last 6 months of 2011 and meet the other criteria listed in IRS Pub 504, we can be considered unmarried.

2. Form 8332 as I understand it deals with permission to claim a childs exemption and has nothing to do with the parents ability to file as Head of Household. The criteria to file HOH is clear and is not something that one parent can assign to another with a form.

Im fairly certain I have these facts correct.....my only question at this point:

If both Parents claim HOH after they have been filing jointly for years....will this significantly increase the probability of an IRS audit or have them asking questions? If this is something that the IRS looks at, is there documentation that I can include with my filing that decreases my chances of audit/questions.

[hoosier_dad]

You say in your initial post that you are getting along with your STBX. If that's the case keep in mind that HOH status can be attained with a single child. If you and your STBX think that one child has spent more overnights with you and the other child has spent more overnights with your STBX then you can both file for HOH based on one child.

I know the tax guys usually bristle at those types of agreements, but not much the IRS can do if the two of you agree to the above. Then you both qualify for HOH status.

[Fatheroffour]

I'm not sure why you have the seemingly overcautious fear of an audit.

File based on your documentation. Buy the audit insurance offered by your tax preparer. Let them deal with any headaches down the road.

Of course, the only experience I have with an audit is a relative owning a multimillion dollar corporation. All the lower middle class/ poor people I know that file god knows what in a million differnt ways to maximize their returns never get audited.

[MarylandDadom]

You say in your initial post that you are getting along with your STBX. If that's the case keep in mind that HOH status can be attained with a single child. If you and your STBX think that one child has spent more overnights with you and the other child has spent more overnights with your STBX then you can both file for HOH based on one child.

I know the tax guys usually bristle at those types of agreements, but not much the IRS can do if the two of you agree to the above. Then you both qualify for HOH status.

Yes, we get along. Yes, we can both legally qualify for HOH and save some money on taxes...but how much are we potentially saving this year? Is that tax savings enough to risk an increased chance of IRS audit (if an increased risk actually exists)?

For those saying "who cares if the IRS audits you. If you have everything correct, then you are OK" - not really. How much time and money do you think it would take for me to prove I'm right? If they come knocking, it's unlikely that they will just want verification of the nights spent by each child at each parents house....it's not uncommon for the IRS to expand their scope and look at additional items and years. No I haven't done anything wrong, but explaining every detail of my schedule C for the last 3 years will take both time and money that would exceed the tax savings by sucking it up and having one of us file single.

If there is minimal risk or there is a way to mitigate the audit risk...then yes it makes sense for us both to legally file HOH. If however, having us both file as HOH significantly increases the risk of being selected for audit...the benefit may not outweigh the potential/likely cost.

[hoosier_dad]

Even if you get audited for both claiming HOH, how do you have any risk if both you and your ex state that you each had a child more than 1/2 the overnights?

FYI both my ex and I filed HOH based on different children in 2010.

[MarylandDadom]

Even if you get audited for both claiming HOH, how do you have any risk if both you and your ex state that you each had a child more than 1/2 the overnights?

FYI both my ex and I filed HOH based on different children in 2010.

Superdad:

I think you are missing the point.....it's not that I couldn't prove the accuracy of my return(s)....it's the potential cost and time associated with proving to the IRS that I have done things properly.

[hoosier_dad]

I think you are missing the point.....it's not that I couldn't prove the accuracy of my return(s)....it's the potential cost and time associated with proving to the IRS that I have done things properly.

Not missing the point at all, I'm just not getting your extreme apprehension to a potential audit on an issue where the two sources of info on HOH legitimacy are in perfect agreement. Not to mention the fact that since you are agreed and coordinating your filings there wouldn't even be any red flags to trigger the audit in the first place. Is there something else you are nervous the audit would dive into and find?