Tax questions galore?

Question

My tax situation is going to be a mess this year. I got married and took on a kid in October. We also cared for another kid from June 06-January 07.

Does anyone know what the best combination would be? Can I file by myself or do I have to file jointly? Should I declare both/either of the kids as dependents or would it be better for my wife (as a single mother). Can we claim a child we cared for, for 6 months but never had any legal standing over him?

I'm definitely going to H&R Block this year!

Answer 1

First of all, if you married in 2006, you can only file separate or jointly,not head of household & not single, you usually will get the most benefit if you file jointly and claim both children, you'll probably get earned income credit as well as the child tax credit, you may want to check both ways, separate or jointly depending on income of each person and also see which one can get the best benefit from claiming the children, earned income benefits and tables are based on income levels, but filing separately you lose out on some of the standard deduction. You should be able to claim the other child too, for the exemption, not for the earned income credit, it doesn't really matter though, you can only use 2 children for earned income credit. You will need the social security number of the child too. Go to H & R Blocks website www.hrblock.com and use their free tax estimator and try it both ways before you decide. I have a small tax business myself and have used it before.

Answer 2

You can file a joint return, and that would probably give you and your wife the lowest combined tax bill. Your only other option is to file as married filing separately.

On your joint return you would claim your wife's child as a dependent. What you do about the other child depends on if and how he or she is related to you or your wife. If it's a niece or nephew, or sister or brother, for example, then you could claim them as a qualifying child if the child actually lived with you for over half the year. If it's a friend's child, then you can't claim them - you don't meet a variety of the rules for claiming them.

Depending on the luck of the draw, on what preparer you get if you go to H&R Block, they might or might not handle this correctly. Ask for a supervisor to review it, if you go there.

Answer 3

Don't go to HR Block, those minimum wage earners have very little tax training. Find a CPA, they have to have a degree in Accounting and pass a 16 hour exam.

You should definitely file a joint return with your wife with at least 3 personal exemptions (you, wife, and kid). The other child you took care of for the year, you most likely will be able to take the personal exmption for as well. That depends on who else could possibly claim the other child as a dependent.


Consult a CPA licensed by your state board of accountancy.

Answer 4

You should definitely file MFJ (married filing joint).

As for your dependents, a person has to be either a "qualifying child" or a "qualifying relative" to be eligible to be claimed as a dependent.

Basically a "qualifying child" is a child who is
-a relative under the age of 19 (or student under the age of 24)
-did not provide more than 50% of their own support
-lived with you at least half the year

A "qualifying relative" is someone
-who lived with you all year
-you provided more than 50% of their support
-they didnt make over $3,300 in gross income
-is not a "qualified child" of someone else

It sounds as if your wife has a child from a previous relationship. This child would definitely be listed as a dependent, assuming there is no divorce decree stating otherwise.

As for the other child, he MAY be a dependent if he meets the requirements above.

http://www.irs.gov/pub/irs-pdf/i1040a.pdf
pg 21 discusses dependents

Answer 5

you don't have to file jointly, i mean you'll get more money filing head of household with 2 dependents and then she could file the same as you the only thing they are going to ask for is your SS# and her SS#