If a person is alive at any time during the year, he/she is considered alive for the entire year.
Example 1: A child is born, but passes away that same day. He/she can be claimed by his parents as a tax dependent for that year;
Example 2: Your spouse passes away on December 15th of the year. You still can file a joint return with that spouse.
NOT MARRIED as of the last day in the year:
- Single filing status: No child, grandchild, parent, sibling, etc. lived with you in your home for more than 6 months during the year.
- Head of household filing status: You paid over 50% of the costs of a home (mortgage payment, rent, utilities, etc.) in which you and a child, grandchild, parent, sibling, etc. lived for more than 6 months during the year.
- Example 1: You rented an apartment in which you and your minor child lived for the entire year. You would qualify for “head of household” filing status.
- Example 2: You and your minor child lived in the basement of your folks’ home for 8 months of the year. You did not pay any rent during this period. You would NOT qualify to use “head of household” status. Your filing status would be “single.”
MARRIED as of the last day of the year:
- File a “joint return” with your spouse. OR
- File “head of household” if you:
- lived separately from your spouse for the entire last 6 months of the year, AND
- during this period of separation from your spouse, paid more than 50% of the costs of a home (mortgage payment, rent, utilities, etc.) in which you and a child, grandchild, parent, sibling, etc. lived.
If you are married as of the last day of the year, you cannot use the “single” filing status.
Note: Neither the IRS nor Utah recognizes a “common-law” type of marriage. If you cohabitate with your partner but are not married, you cannot use the “joint” filing status.
My spouse passed away during the year. What filing status do I use?
Use the “joint” status for the year in which your spouse passes away. For the following two years, use the status “qualifying widow(er)” if you haven’t re-married and still have a dependent living with you.
We’ll discuss this when you are in our office at tax time. If it can’t be done then, send us an email at contact@ashworthtax.com and let us know what you have in mind, what your business will sell/perform/produce, how many owners you will have, the start-up date for the business, etc. We will then review options with you.
We keep tax returns on file in our computer system. Call/email us and we’ll send copies of the returns to you. (It’s easiest for us to email the returns to you.)
If we did not prepare your tax returns for the year in question, let us know—there are other things we can do to help you in this area.
If you have exhausted your attempts to get a W-2 form from a particular company, bring in your last pay stub from that company. Hopefully, it will reflect “year-to-date” amounts that can be used on your tax return. If not on the pay stub, we will need to know the name & address of the company.
Get it to us ASAP. (Scan & email it; fax it; or mail it to us). Never respond to IRS or Utah correspondence without first letting us look at it. (We will then let you know what needs to be done.)
Maybe. A return is only required to be filed if income is above a certain level. Bring you child’s W-2 forms along with you when you come for your appointment. We will determine whether a return needs to be filed. (If so, we’ll prepare that return for free!)
Yes. If the requirements are met, you can claim just about anyone living with you as a dependent (such as a brother/sister, nephew/niece, parent, friend, etc.).
If you have someone living with you other than your dependent children, let us know.
According current IRS law, the custodial parent is the one having the right to claim the child as a tax dependent. The custodial parent = parent with whom the child lived for more than ½ of the year. (Clients will often say they have “joint custody”. That has no bearing on this matter.)
The custodial parent may agree to let the non-custodial parent claim the child in question. This may require IRS Form 8332 to be completed.
Divorce decrees may stipulate which spouse is entitled to claim a child. However, the IRS is not bound by divorce decrees. Of main importance is coming to an agreement with your ex-spouse. If both spouses claim the same child, you can count on being contacted by the IRS.
If there is a concern in this area, let us know.
Generally children 18 or younger living at home can be claimed as dependents. Children 19 – 23 can be claimed if:
- They were in school “full-time” for 5 months (which would include partial months) during the year. “School” = high school, college, vocational school, etc. “Full-time” is as determined by that institution. OR
- During the year were not in school for 5 months, but earned less than approximately $4,000.
Children over 23 years of age only can be claimed if they earned less than $4,000 during the year.
3 years from the due date of the return. Example: The tax return for the year 2016 is due on April 18, 2017. You need to keep your tax records until April 18, 2020.
No. The market is too dynamic for us to stay current on all options available to investors. We can, however, identify the “tax consequences” of the investments you may be considering.
Sometimes companies will offer you different options in terms of accessing your retirement funds. We can review the tax consequences of each of these options. Or you may consider pulling retirement income from different sources—selling stocks, withdrawing money from IRA or pension accounts, selling property, etc. Again, we can advise you of the tax consequences related to each.