I think I picked the wrong company for my CE hours

[Cathy]

Saw a "good deal" for my 15 hours, however, after the first 5 minutes, I think I wasted my money. Here is what is said about claiming Head of Household:

Unmarried Head of Household -- To qualify as a head of household, a taxpayer must

meet the following four conditions:

1. The taxpayer is (a) unmarried and ( b ) provides a home for a certain other

person(s).

2. The taxpayer provided over half the cost of keeping up a home that was the main

home for the entire tax year for the taxpayer’s parent(s) whom the taxpayer can

claim as a dependent(s). The parent(s) did not have to reside in the taxpayer’s

home.

3. The taxpayer paid over half the cost of keeping up a home in which the taxpayer

resides and in which one of the following also resided for more than half of the year:

a. The taxpayer’s unmarried child, adopted child, grandchild, greatgrandchild,

(etc.), or stepchild. It does not matter what age the child was,

and the child does not have to qualify as a dependent of the taxpayer.

b. The taxpayer’s married child; this child must be a dependent of the

taxpayer (under most circumstances).

c. The taxpayer’s foster child; this child must be a dependent of the

taxpayer.

d. Any other relative the taxpayer can claim as a dependent.

4. A married taxpayer who lives apart from his/her spouse can claim head of

household status if:

a. The taxpayer lived apart from his/her spouse for the last six (6) months of

the tax year.

b. The taxpayer files a separate tax return from his/her spouse.

c. The taxpayer paid over 50% of the cost of maintaining his/her home for

the tax year.

d. The taxpayer’s home was the main home of the taxpayer’s child,

adopted child, stepchild, or foster child for more than half of the tax year,

and, the taxpayer claims such a child as a dependent.

Someone, please tell me I'm not nuts already before the new season even starts! The part above in red was changed several years ago. Now, in order for a parent to claim head of household with just a child involved, the parent must claim the dependent child unless they sign the wavier for the other parent (IF that is the situation) to claim the child as a dependent. If no other parent is involved, yada yada, the parent MUST claim the child as a dependent in order to claim head of household, right?

Thanks,

Cathy

[kcjenkins]

From Pub 501

IF the person is your . . . qualifying child (such as a son, daughter, or grandchild who lived with you more than half the year and meets certain other tests) AND . . . he or she is single

THEN that person is . a qualifying person, whether or not you can claim an exemption for the person.

Qualifying Child

There are five tests that must be met for a child to be your qualifying child. The five tests are:

1. Relationship,
   
   
2. Age,
   
   
3. Residency,
   
   
4. Support, and
   
   
5. Joint return.
   

So the biggest problem I see with that section is the age issue

Age Test

To meet this test, a child must be:

• Under age 19 at the end of the year and younger than you (or your spouse if filing jointly),
  
• A full-time student under age 24 at the end of the year and younger than you (or your spouse if filing jointly), or
  
• Permanently and totally disabled at any time during the year, regardless of age.
  

[Jack from Ohio]

Just finished the NSTP 1040 Update Seminar on Thursday. 16 CPE credits that I know are accepted by the IRS. 4 hours on the tax implications of Obamacare as its tentacles are enacted over the next 4 years, several hours of networking with dozens of other more experienced tax professionals at lunches, breaks etc.

Cost $225 plus a couple of meals.

Sometimes the "deal" is not a "deal" just because the price is better.

Comparing White Castle burgers to Ruth Crist steak...

[Cathy]

From Pub 501

IF the person is your . . . qualifying child (such as a son, daughter, or grandchild who lived with you more than half the year and meets certain other tests) AND . . . he or she is single

THEN that person is . a qualifying person, whether or not you can claim an exemption for the person.

Qualifying Child

There are five tests that must be met for a child to be your qualifying child. The five tests are:

1. Relationship,
   
   
2. Age,
   
   
3. Residency,
   
   
4. Support, and
   
   
5. Joint return.
   

So the biggest problem I see with that section is the age issue

Age Test

To meet this test, a child must be:

• Under age 19 at the end of the year and younger than you (or your spouse if filing jointly),
  
• A full-time student under age 24 at the end of the year and younger than you (or your spouse if filing jointly), or
  
• Permanently and totally disabled at any time during the year, regardless of age.
  

KC,

The following is also from Pub. 501 and discusses Head of Household filing status:

Head of Household

You may be able to file as head of household if you meet all the following requirements.

1. 
   You are unmarried or “considered unmarried” on the last day of the year.
   
   
2. 
   You paid more than half the cost of keeping up a home for the year.
   
   
3. 
   A “qualifying person” lived with you in the home for more than half the year (except for temporary absences, such as school). However, if the “qualifying person” is your dependent parent, he or she does not have to live with you. See Special rule for parent, later, under Qualifying Person.
   

If you qualify to file as head of household, your tax rate usually will be lower than the rates for single or married filing separately. You will also receive a higher standard deduction than if you file as single or married filing separately.

How to file. If you file as head of household, you can use either Form 1040A or Form 1040. Indicate your choice of this filing status by checking the box on line 4 of either form. Use the Head of a household column of the Tax Table or Section D of the Tax Computation Worksheet to figure your tax.

<a name="en_US_2011_publink1000220780">Considered Unmarried

To qualify for head of household status, you must be either unmarried or considered unmarried on the last day of the year. You are considered unmarried on the last day of the tax year if you meet all the following tests.

1. 
   You file a separate return (defined earlier under Joint Return After Separate Returns).
   
   
2. 
   You paid more than half the cost of keeping up your home for the tax year.
   
   
3. 
   Your spouse did not live in your home during the last 6 months of the tax year. Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances. See Temporary absences, later.
   
   
4. 
   Your home was the main home of your child, stepchild, or foster child for more than half the year. (See Home of qualifying person, later, for rules applying to a child's birth, death, or temporary absence during the year.)
   
   
5. 
   You must be able to claim an exemption for the child. However, you meet this test if you cannot claim the exemption only because the noncustodial parent can claim the child using the rules described later in Children of divorced or separated parents or parents who live apart under Qualifying Child or in Support Test for Children of Divorced or Separated Parents or Parents Who Live Apart under Qualifying Relative. The general rules for claiming an exemption for a dependent are explained later under Exemptions for Dependents .
   

Years ago, I was able to amend three years tax returns for a 70 year old client and changed her status from Single to Head of Household as she had a 35 year old daughter living with her. The mother provided the home and all costs associated with it. The daughter made approximately $35,000 per year but and did not contribute to the household bills as she had a very serious medical condition (she wasn't disabled, however) and large medical bills to pay. The mother got hefty refunds for those three years and the next 4 years or so until they changed the rules.....The parent now MUST claim her child as a dependent in order to qualify for HOH (with the exception, of course, for a parent who released the exemption to the other parent....that parent can still claim Head of Household in addition to Child Care and the Earned Income Credit).

I called and cancelled last night after I found another error a couple of pages later. The material dealt with 2011 returns, however, the company still had the $3,650 listed for 2011 in regard to the gross income test rather than $3,700.

I just received a call from the owner and he told me he has already mailed my "book". It must be neat to have a post office open on Sunday morning! As soon as I get the book back to him, I'll get a refund.

Like I sometimes tell my clients: "You get what you pay for!"

Take care,

Cathy

[Cathy]

Hi KC,

I went back to Pub 501 and saw what you took from the chart. However, see the footnote #2 under the "If the person is your......". Footnote #2 refers you to dependency exemption and it also states the situation with separted/divorced parents. That chart is really confusing!!!!!!!!! I also went through the interactive Filing Status tool on IRS.gov and it gave a Single filing status without claiming the child and not having the release of exemption situation.

Thanks again,

Cathy

Jack,

I understand completely! Thanks for not just screaming "Cheapskate!!!!!". :spaz:

[kcjenkins]

Cathy, you are right. I do actually know better than to rely on IRS Pubs instead of going to the Code! Sometimes it's hard not to suspect they deliberately try to write them to confuse, isn't it?

And it's not "Cheapskate" to try to get a bargain deal. After all, this board is one of the best "continuing ed" sources I know, but you can't get CE units for it!

Sometimes you just have timing issues, and want to get the technical issue of the credits behind you quickly and cheaply, while still doing tons of study all year.

[mcb39]

And it's not "Cheapskate" to try to get a bargain deal. After all, this board is one of the best "continuing ed" sources I know, but you can't get CE units for it!

Sometimes you just have timing issues, and want to get the technical issue of the credits behind you quickly and cheaply, while still doing tons of study all year.

Absolutely correct. If I could have CE credits for what I have learned on this board, my pockets would be full. Thanks again to all and to Eric for making it possible.

[Cathy]

Cathy, you are right. I do actually know better than to rely on IRS Pubs instead of going to the Code! Sometimes it's hard not to suspect they deliberately try to write them to confuse, isn't it?

And it's not "Cheapskate" to try to get a bargain deal. After all, this board is one of the best "continuing ed" sources I know, but you can't get CE units for it!

Sometimes you just have timing issues, and want to get the technical issue of the credits behind you quickly and cheaply, while still doing tons of study all year.

Awww....thank you, KC! You are 100000% per cent right. In fact, I went ahead and used the company as it's so late in the year already. It really kept me on my toes!

And, mcb 39 you're also correct! Note to self: it's time to make a donation to Eric to keep us up and running!

Take care, y'all!

Cathy