Sunday, November 26, 2006

Claiming the Child for 2007? Which taxpayer WILL?

With my “Get Sharp as a Tack on Taxes” seminar coming up this week, I thought that I would post a comment regarding tax basics for the 2007 season. This tip is in regards to who can claim a qualifying child when two taxpayers are trying to claim the dependency exemption.

The IRS has issued guidance for taxpayers that may have a "qualifying child" in common with another taxpayer for purposes of claiming certain tax benefits. A conflict arises when two or more taxpayers wish to claim a dependency exemption, the child care credit, earned income credit, or child tax credit based on the same child. Similarly, a single, divorced, or separated parent may wish to claim the head of household filing status based on providing a home for a qualifying child, or taxpayers may seek to exclude dependent care assistance payments for a qualifying child from their income.

The IRS considers that the determination of who is allowed to claim the qualifying child in each of the above situations applies to all of these situations as a group. Two or more taxpayers may not claim the same child for different purposes on their respective tax returns, with one exception. This exception allows the non-custodial parent to claim the child for purposes of the dependency exemption and the child tax credit only, and permits the custodial parent to claim the child for all other purposes listed above.

For more tips like these and if you are also in the Atlanta area this up coming Wednesday November 29th, stop by the College Park Library for the seminar. Start time is 6PM.

Be there to get more information on keeping your Business N Synergy!

Brian N. Stovall
http://www.thebricogroup.com/
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