Question

9) Explain the rules for being an "abandoned spouse" and include which filing status should be used if one qualifies as an abandoned spouse. 10) Is it possible for a taxpayer to file "head of household" if he/she has a dependent child that lives in the home and over half of the cost of maintaining the home is paid by the taxpayer....but, the noncustodial parent actually claims the dependency exemption and child tax credit? 11) Sarah (age 32), single, has been caring for her young cousin Brianne (age 2) since Bri's mother has been unable to do so. Bri lived with Sarah for the entire year and Sarah provided all of her support thereby qualifying Bri to be her dependent. What is Sarah's filing status for the year?

Answer 1

Ans a): Marital abandonment refers to a situation in which one spouse severs ties with the family, forsaking his or her responsibilities and duties to the family. Simply moving out of the family home in an attempt to create a temporary or permanent separation is not considered abandonment.

Abandoned Spouse Rules allow a taxpayer who was abandoned by her spouse to file as head of household. Congress enacted these rules because otherwise the separated parent may be forced to use unfavorable tax rates if she must file married filing separately. To qualify as an abandoned spouse, you must satisfy the following requirements:

• you did not file a joint return
• you can claim the child, stepchild, or adopted child as a dependent
• your qualified dependent lived with you for more than ½ year
• you paid for more than ½ of household expenses during the last 6 months of the tax year
• your spouse did not live in the home during the last 6 months of the tax year

Filing status to be used in case of abandoned spouse is Head of Household.

Ans b): The head of household status can be claimed if:

• you are unmarried, or are considered unmarried, by year-end,
• you paid more than ½ of the expenses for maintaining a household,
• you provided more than 50% support for a child, parent, or other qualifying relative, and who, except for a parent, lived with you for more than ½ year, and
• you were a United States citizen or resident for the entire year.

*In determining whether a child lives with you for more than ½ year, temporary absences, such as vacation or when the child stays with the other parent pursuant to a child custody agreement does not count.

As a custodial parent, you can allow your ex-spouse to claim 1 or more of your dependents without giving up your head of household status, which may be advantageous if your ex-spouse is in a higher income tax bracket, but whose income is still below the phase-out limit for claiming dependent deductions or who is not subject to the alternative minimum tax, which is not reduced by exemptions. Who claims who can be changed from year to year, between you and your ex-spouse, but the noncustodial parent must file Form 8332 (Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent) for every year that he claims the exemption, and you must also sign the form.

Ans c): The head of household status can be claimed if:

• you are unmarried, or are considered unmarried, by year-end,
• you paid more than ½ of the expenses for maintaining a household,
• you provided more than 50% support for a child, parent, or other qualifying relative, and who, except for a parent, lived with you for more than ½ year, and
• you were a United States citizen or resident for the entire year.

* A qualifying child or relative must be legally related to you.

The requirement for a qualifying child or dependent extends beyond just your own son or daughter. To be considered a qualifying child, the child must meet the criteria in each of the following categories:

• The child must be your biological or adopted child, stepchild, foster child, sibling, step sibling, half sibling, or a descendant (child, grandchild, great grandchild, etc.) of one of these relatives.
• The child must have lived within your home for more than six months during the tax year.
• The child needs to be younger than you.
• As of the end of the tax year, the child must be under 19 if he is not a student, or under 24 if he is a full-time college student.
• The child must not have paid for more than half of his living expenses during the tax year.

To be considered a qualifying dependant, the following criteria should be met:

The following relatives are considered qualifying dependents for the head of household filing status as long as you provided more than half of her financial support and she lived with you for more than half of the year:

• Your biological or adopted child, stepchild, foster child, sibling, step sibling, half sibling or a descendant (child, grandchild, great grandchild, etc.) of one of these relatives who is permanently and totally disabled, even if he or she does not meet the age requirements to be a qualifying child.
• Your mother or father.
• Your stepfather, stepmother, niece, nephew, a sibling of one of your parents, or your son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law.

In the given case Sarah should file return under the status of Head of Household as Brianne qualifies to be a qualifying dependant.