Odd Situation / Tax Question

[Hound dog]

Nichole worked a whopping 3 months at Mc D's. Now she wants to claim Aubrey on her taxes to get the single parent refund that's supposed to be 1500.00 so she can pay for her spring quarter of school. (she just found out the program has to go straight thru until the degree, no breaks as she thought)

Now this poses a huge problem for husband and I as we've been claiming them both as dependents all year. Because, well heck, they are. And husband says if she attempts to claim Aubrey, we'll owe the govt a couple thousand at the end of the year instead of coming out with our heads above water. Any refund will go to MO for K's "supposed" back childsupport. (which is actually paying for the time her Mom was on welfare)

I understand her wanting the money for school. Yep. Sure do. But we simply can't afford to be in the hole with the govt. Not long ago there was a nasty spat over it. I told Nichole she could claim Aubrey if she moved out and actually paid the child's bills. (I'd warned her not to go there and she kept right on pushing)

I don't think Nichole even needs to file for pete's sake. She didn't make squat. I do think, and am fairly sure, that boyfriend has now backed up on "helping" her to pay for spring quarter. Sheesh. I wish this kid would get a clue. This is like the 3rd time he's pulled this on her. Last time it was boyfriend who wanted to claim Aubrey so he could get the return. I told her then he could when they get that apartment together. Yeah, right.

I did remind her that at the end of this quarter she can begin to work in her field. We have a private ambuance service right around the corner that would hire her for at least 10.00 an hour. She could do that and save the money for spring.

Even if husband changed the dependents thru work, it's late enough now we'd be stuck. So any ideas? Any tax people out there who could offer some info. husband does our taxes.

Thanks

 

[DammitJanet]

Ok I havent done taxes in many years but...the dependent rule hasnt changed I dont think. There is a certain amount of money that if they havent made over that amount...and you have provided all other support for them...then you are the ones who get to declare them as dependents....and get to claim the earned income credit I am assuming.

Now she would get to file a return to get back any taxes she paid but as a person who was claimed as a dependent on another persons return. Considering I doubt she paid much in...she wouldnt get much back. She was probably banking on the earned income credit.

Boyfriend shouldnt be able to claim anyone at all because he isnt supporting anyone.

Go online to the irs website and check out the rules.

 

[Hound dog]

Thanks Janet. I thought that's how it worked when K lived with us. I'll make husband double check to be certain.

hugs

 

[susiestar]

The rules for dependents are pretty clear. If they have lived in your house and you have paid their bills for more than 6 months you can claim them. Nichole needs to get her head on, work for the private ambulance service, ditch the troll boyfriend who keeps backing out of his promises AND not supporting his baby. Nichole and aubry have lived in YOUR house, on YOUR $$, and are YOUR dependents to claim. Niether Nichole or boyfriend have supported Aubrey financially by paying all the bills. Nichole needs to apologize to you AND to drop this until she is actually supporting her daughter. Period.

 

[KTMom91]

Another thing...if Nichole files first, and claims Aubrey, and gets her Earned Income Credit and all through one of those file fast and get a loan on your refund places, you and husband won't be able to file electronically and claim Aubrey. If you both claim the same dependents, the IRS will send you each a letter telling you to prove who has the right to claim the dependents. If no one does anything, the IRS will make the decision, and then bill one of you for the amount of the refund plus interest. This takes them about three years, so the interest can add up. Owing the IRS can affect Nichole's student loan situation, if she has one, and as you already know, back child support comes right off the top.

If you have an IRS TAC office nearby, go in and talk to someone regarding the tax law on this. It's been several years since I worked there, and things change, and better safe than sorry.

 

[witzend]

KTM has hit it pretty much on the head. I know divorced couples who go through this all of the time. What has happened several times with people I know is that whoever files first gets the deduction, and the IRS tells the other to take the first one to court if they want the money back. They generally don't make decisions as to custody and dependency. He who hesitates is lost.

Nicole's being a bit nervy on this one. I would bill her for this year's living expenses. I doubt she has any clue as to how much money you put out on her and Aubrey in a year.

 

[TerryJ2]

You've gotten some GREAT info and advice. SHeesh, the things I learn here!

 

[mrscatinthehat]

Shoot you get to claim them. Several years ago I had a roommate that I paid the majority of the bills. I ended up claiming her and her son. Don't have to even be family to be claimed as a dependent. Just doing the majority of the support.

beth

 

[MyFriendKita]

Actually the situation is not so cut and dried:

http://www.irs.gov/publications/p501/ar02.html#d0e2859

by the way, even if it turns out in your situation that you can claim Nichole, she should still file to get a refund of any tax withheld; it's possible she would also be required to file a state return even if she isn't required to file a Federal return.

 

[Stella Johnson]

It may not be that cut and dried but you did support the child, she did not. I would be inclined to put her out on her bum if she did that to me... but that's me. I would call the IRS. She clearly didn't make enough money to even attempt to prove she supported the child.

steph

 

[Hound dog]

Thanks guys. Knew I could count on you all.

No, Nichole has no clue as to how much we actually support her and Aubrey. Although after the spat when this was "discussed" she got a few eye openers. She's not meaning this spitefully, or else she'd be out so fast her head would spin. She's just worried about having enough money for her spring quarter.

Once she does move out, I don't worry about not having the dependants as our bills will drop dramatically. The child is gifted at running up the monthly bills. Mostly just by not thinking and never having had to pay them.

husband files online. I doubt Nichole will be faster. lol We'll double check everything before we file, which is why I was asking this far ahead.

Hugs

 

[Stella Johnson]

If the IRS questions it, tell them to look at her income. That is enough proof she isn't supporting the child I would think.

 

[susiestar]

From what the tax advisors told us last year, we COULD attempt to claim Wiz. However, since my parents are supporting him, THEY have the right to claim him. If we claim him, and tehy do, then the IRS will give teh claim to whomever files first, and tehn it will very likely trigger an audit in a couple of years.

The tax advisor we see used to work for the IRS, and he is pretty up on the laws. The first year Wiz lived with them, he was with us for just over 6 months, and them for just under 6 months. We still let them claim him, and as long as we didn't also claim them the IRS doesn't really care.

I hope Nichole sees how unfair it would be for her to claim herself and Aubrey. By rights, as seh lives with you and is in school, you should claim them BOTH. I know she is scrambling for $$ for school, but stealing from the hand that supports you is just wrong, and rather stupid.

Praying she sees teh light on this and you don't ahve a huge fight over this.

 

[donna723]

I don't know if it's exactly the same, but when I was still receiving child support for my son it was in the divorce decree that I was the one who got to claim him on my taxes every year. He rarely even saw his father and never spent even a single night at his house. I filed, claiming him as a dependent, and got my refund. Then my ex filed and tried to claim him too, probably thinking it would just slide through unnoticed. He actually did get a bigger refund with the extra on it from claiming our son ... BUT a few months later they caught up with him! He had to return the extra he had gotten on his refund plus pay a sizeable penalty. If he had contested it, I could have whipped out the divorce papers and he still would have not had a leg to stand on.

The same thing happened to a girl at work who had tried to claim her daughter that her ex-husband was entitled to claim. They took the extra money back and she had to pay some stiff fines and penalties because her ex could prove that he had supported the girl and was entitled to claim her, and he had the documentation to prove it.

 

[Shari]

DEX claimed both difficult child's the first 2 years we were divorced. Its unlikely that I filed first, as the first year, I had to file an extension - but the dependency was not questioned and I got my refund as filed. About 2 years later, we both got letters from the IRS saying we both had claimed the same kids.

 

[hearts and roses]

I think before anyone files anything, you should make a clear decision.

The first year after my divorce from exh, we both filed our girls. I found out from his sister so I called the IRS and explained what had happened. I was allowed to claim them as they lived with me full time and not with him. That part was cut and dry because we were their parents.

In your situation, it may not be so clear. I wouldn't take the chance of your both claiming the same dependent. Clear it up beforehand.

 

[Star*]

First of all - I think in order to GET a Child Credit you must EARN at least 3000.00 so $150 from McDonalds is NOT going to help her.

I would seek out someone who knows tax laws and ask them - Wonder if this was the plan all along when she and idiot boy spent her money.