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Tax Law (Questions About Taxes)/Head-of-Household Filing Status

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Question
A co-worker asked me about how he should file this year because his mother had moved in with him and lived there the entire year in 2014. He earns $35,000 annually between two jobs and his mother works at the same place and earns $12,000 annually in addition to $8,000 in social security benefits for a total of $20 K. So he wants to know if he should file as Head of Household. I told him he has to provide more than half his mom's support to claim her as dependent and file as Head of Household. It's easy if the dependent has no income but this case seems so different. Mom can't afford to live alone yet has substantial income. I know he can impute the FV of rent as support but what else? How does the $20 K she earns affect whatever the IRS would deem HALF her support? Does that mean her son would have to contribute support both real and imputed of more than 20 K? Exactly what constitutes half her support puzzles me. I told him they should also run the numbers filing separately to see what method yields the most money coming into the household. I would appreciate your comment on this issue, Mr. Stancil.

Answer
Alan,

Thanks for your question.

You're overthinking this. Support mean anything you spent to support her, including a share of items such as housing. If she spent all her income, you must provide more than that amount. If she invested a portion, that amount did not go toward her support. Support for her is whatever she spent on herself.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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