Blog Archives

Tax Considerations When Supporting Parents

As I have been helping my Mom transition into life as a widow many interesting facts have begun to resonate. Particularly intriguing for me today under Regs. §1.2-2(b)(4) parent(s) can be claimed as a dependent if you meet the usual support, citizenship,

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Posted in Deductible Expense, Dependent, Family, Filing Status, Health Insurance, Tax Deductible Expenses, Tax Filing Status, Tax Guidance & Preparation

Tax Treatment of a Reverse Mortgage

A reverse mortgage is generally a loan where a lender pays a lump sum, a monthly advance, a line of credit, or a combination of all three to you while you continue to live in your home and retain title to it.

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Posted in Death, Debt, Deductible Expense, Dependent, Distributions, Family, Mortgage

When Several Different People Provide Support IRS Form 2120 – Multiple Support Declaration

The Perturbing New Treatment of Patents Under the Tax Cut & Jobs Act (TCJA)

Multiple Support Declaration

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Posted in Dependent

What is a Dependent Qualifying Relative?

According to IRS Publication 501, Exemptions, Standard Deductions and Filing Information. a dependent qualifying relative can be any person who lives with you all year, is not a qualifying child of another taxpayer, and someone for whom you provided over half of his

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Posted in Dependent

IRS Publication 503 – Dependent Care Expenses

A taxpayer came to me today for verification on dependent care expenses. Their basic profile may be similar to yours. A husband and wife with two children in day care. The wife is a full time student that does not

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Posted in Children, Dependent, Disallowed Expenses, Husband/Wife, Tax Guidance & Preparation, Tax Problems & Requests, Taxable Income, Unemployment

Dependency Exemption and the American Opportunity Tax Credit

A new client came to me this week - husband/wife - filing a joint tax return.  Their son a full time 21 year old student with some earned income but not enough to provide for over one half of his

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Posted in Dependent, Education Expense

Dependent Care Credit IRC 21

Business Entity Selection and the Tax Consequences of Converting

According to Internal Revenue Code Section 21, the maximum tax credit as of this posting date remains at $1,050 (35% of $3,000) for one qualifying individual and $2,100 (35% of $6,000) for two or more. This credit is for expenses paid for the

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Posted in Child Tax, Children, Deductible Expense, Dependent, Employment Tax, Tax Credit

IRS Form 8332 Outweighs Divorce Decree Regarding Dependency Exemption

Section 152(e) of the tax code specifies how to determine the dependent status of children of divorced parents. This code section states that the noncustodial parent can claim the dependency exemption for a child when the custodial parent signs a written declaration that the

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Posted in Child Tax, Children, Dependent

IRS Guidance on Qualified Long Term Care Insurance Contracts

IRS Notice 2011-68 provides interim guidance on the federal income tax treatment of annuity and life insurance contracts with a qualified long-term care insurance (QLTC) feature. The guidelines address the application of certain changes to the federal income tax rules governing annuity

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Posted in Dependent, Health Insurance, Medical Expenses, Tax Guidance & Preparation

Noncustodial Parent and the Dependency Deduction

The bottom line is that if your estranged spouse or X spouse is inappropriately claiming your child as a dependent you may encounter problems with the IRS.  If you are the custodial parent one solution that seems to help is

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Posted in Dependent
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