Your Tax Question - 047(c)

(This segment is a continuation from Your Tax Question – 047(b) which explores the question about filing as Head of Household.)

Who is a Qualifying Relative?

A Qualifying Relative who qualifies must meet five tests as well and does not meet the Qualifying Child tests.

1. Gross Income Test
a. Must be LESS than the dependency exemption amount
i. $3,650 for 2010

2. Support Test
a. The taxpayer must provide more than ½ of the dependent’s support for the year
b. Special notice for Multiple Support situations

3. Relationship, or Member of Household, Test (either)
a. Varied levels of blood relationships
i. Death and divorces not a factor
b. Must be a member of the household all year

4. Citizen or Residency Test
a. U.S., Canada, Mexico
b. OR Legally adopted child but alien resident

5. Joint Return Test
a. Married individuals are not allowed to file as such for this exemption
i. Special joint return test allowance for couples not required to file a return

These are the 5 tests that individuals must meet in order to be considered your Qualified Relative.

There is one other situation that may cause you to be able to file as Head of Household. If your parent lives in his or her own home but you financially maintain that home then you are able to file as Head of Household.

According to your original question, Bart, I would agree that your son does indeed qualify as your Qualified Child but I do question your ability to claim your sister and brother-in-law as your dependents because the facts that you have given do not convince me that they will meet the Qualified Relative Test. To determine this I would need you to get ahold of me with more information.

I really hope this helps.
John

PS. Were you aware that I am accepting first time clients for the 2010 tax year filing season at just $69.00 per client? That’s unheard of but true. They say that you get what you pay for but I am willing to be that in this case you will get a whole bunch more.