Question

Normal No Spacing 1Heading 2 Tale 3. Laura is 28 years old, unmarried and earned $40,209 in 2018. She lived by herself, however, she needed to take care of her mother who lived in a senior housing development. Laura provided more than half of her mothers support in 2018. Her mother received $9,000 in Social Security in 2018. Laura had health insurance coverage from the market place from March to December. Based on the facts above, please answer the following questions: a. What is the best filing status for Laura? Can Laura claim her mother as a qualifying relative on her tax return? Please explain. b. Will Laura be subject to the health care penalty for the months that she was not covered in 2018? Please explain. c.

Answer 1

Part A

The best filling status for Laura is the Head of household

He has been unmarried for the entire tax year. Also her mother is a qualifying dependent as Laura provides half of her mother's support.

Part B

Yes. Laura can claim her mother as a qualifying relative on her tax return. Laura provides half of her mother's support. It is not compulsory for relative to stay with a taxpayer to be eligible for qualifying relative.

Part C

No. Laura will not be subject to the health care penalty for the months that she was not covered in 2018. The gap in coverage is less than three months. If the coverage gap is for 3 months or more, then penalty is applicable.