Any Tax Guru's Out There?

[2angelsinheaven]

Here is the situation, what do you think?

Our roommate, father of my godchildren is seperated but not legally divorced from his wife. Between the months of Jan.1.2003-May.2.2003, he worked full time and provide a home for her and the children, he paid all the bills. On 5/2 she left him and took the children to live with another man. (Jerry Springer, yikes) because she was pregnant with that man's child. He moved in with us. Pays 1/2 rents, bills, etc. He had girls sat night-mon morning and wed night-friday morning each week. And have gave her weekly support for the girls. In November she went into preterm labor and the girls came to live here full time and have been since. Here is where it gets even more sticky and the tax question...

She told him she wants to whole return, no if ands or buts about it. She wants him to file jointly and give her the check (as it would have both names, he couldn't cash without her). She says she needs the money to help with items for the baby who she had with another man... yikes!!!!! He needs it because he wants to be able to rent a larger home for his children and get them the things they desperatly need.

Here is some info needed I think to help if you can answer...

He is 27, employed full time and makes around 23,000 a year
She was employed full time from 1/03-3/03 and made 4,000

The girls lived with both mom and dad from 1/03-5/03... split between both homes between 5/03-11/03 and since early November they have lived here full time. He did give her money between 5-11/03. They have not been to court.

He wants to file without her so he can use the return for the house... can he, how long will it take (will it be held up because he files seperate? and had filed joint before). I heard he can't file EIC though if married sep... but this would be ok if he could file sep.

Any ideas??

 

[femmegirl]

I used to prepare taxes a few years ago. At that time, the parent with whom the children lives is supposed to claim the children. If I were you or him, I would call H&R Block and ask them the question. I know they can answer it and it is company policy to answer questions even if they are not going to prepare the actual taxes.

I hope I helped some

 

[Hercules10]

If they were still legally maried as of 12/31/03 then he can not file as single. HE must file 'Jointly' or 'Jointly Filing Seperately'. Unfortunately "Jointly Filing Seperately" is usaully bad because of the higher tax rates. But at his income level it might not matter too much.

If he can provide receipts for the expenses he incurred to care for the children then he can claimed them on his return and she can't. The key is to have the receipts to prove it. He has to prove that he provided the majority of the expenses for their care.

She does not have to force him to sign over the return. Just filing 'Jointly' will probably get a larger refund (if any). It would be in her best interest to play nice and agree to split the money some way.

Good luck.

 

[jel0511]

This is a VERY Sticky situation, and I'd definately seek professional tax help. Here is what I see.... First off, your friend CAN file married filing separately, but most likely will end up owing taxes this way. Nothing would stop him from doing this, it is completely legal and wouldn't need any permission from his wife to do this, but must file MARRIED FILING SEPARATELY. He can not file single, as he is not legally divorced yet. The married filing separately bracket is basically the married filing jointly bracket divided by two. Since he earned most of the money for the family, he'd end up paying MUCH more taxes this way, instead of filing married jointly. Deciding who should claim the children as exemptions is even more tricky, as that usually is laid out in a divorce decree. To be honest, his best way of obtaining as much money as possible is to file jointly and split the check equally. Since there is no divorce proceedings going on, there is no way to decide who is entitled to what. If your friend hasn't yet, contact an attorney and start preceedings right away. Maybe he can get some things in writing and then the tax situation could be resolved. But as a current CPA (no longer practicing though) I've seen this situation more than once (people separated, currently going through a divorce) and most of the time, they filed jointly and split the tax refund equally. No one is more entitled than the other, and you could make an arguement that he is entitled to more since they were separated for part of the year, but they are still married and the IRS sees it that way. If I were still practicing, I'd advise to file jointly and come up to some equitable split of the refund, with it being no more than 50 50 between the parties. The wife is NO WAY entitled to the entire refund, and with the check made out to both parties, no way that it can be cashed without some sort of agreement in place. I'd also make sure once an agreement is come to, place it writing and then have BOTH parties take the check to the bank together and have it cashed and have the teller make separate envelopes up with each parties amount. This is the best way to protect both parties.

 

[lacool]

He IS NOT required to file MFJ or MFS. He did not live with his spouse at all for the last 6 months of the tax year, so is considered unmarried for tax purposes. This is important, because filing MFS, neither he or she would be entitled to credits they could claim otherwise. Since he is living with you, I imagine he is not currently paying more than 50% of expenses to maintain a household for his two children, but he may have if you add up all that he spent during 2003. If so, he is entitled to file as Head of Household. Without my tax books (which are at work right now), I can't give much more of an answer. With the kids splitting time between the two parents, it is a very sticky situation. If you can wait until tomorrow, I can research a bit further, and give a bit more guidance.

 

[lacool]

I copied this from the IRS.gov website. The kids did live with him for more than half of the year, but did he pay more than half the cost of keeping up a home for the year. Probably, if he was the primary bread-winner for the first 5 months of the year.

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

You are unmarried or considered unmarried on the last day of the year.

You paid more than half the cost of keeping up a home for the year.

A qualifying person lived with you in the home for more than half the year (except for temporary absences, such as school).

 

[2angelsinheaven]

Contacted a CPA/Tax Accountant tonight
he file MFS, his return claiming the two girls is $982.00... however if he files HOH, the return is $3,982... if he files with wife it would be $4,200. He is going to give her a choice, sign agreement to split check and have notarized, bring to bank when check is signed and teller hands each party 1/2... or he will file HOH, his taxes will already be prepared and will be ready to be sent with the click on a mouse.

Maybe a new house for Madison and Faith! Happy Day!

 

[lacool]

So glad to hear you got professional advice. Sounds like it was good advice. Good luck to him and his girls!