Is there an age limit on claiming a child as a dependent?

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To be claimed as a dependent, the child must meet the qualifying child test or the qualifying relative test.  To meet the qualifying child test, the child must be younger than taxpayer and, as of the end of the calendar year, either be younger than 19 years old or be a student and younger than 24 years old.  There is no age limit on claiming a child as a dependent if the child meets the qualifying relative test.

As long as all of the following tests are met, the taxpayer may claim a dependency exemption for the child:

• Qualifying child or qualifying relative test,

• Dependent taxpayer test,

• Citizen or resident test, and

• Joint return test.

 

 

 

Can a taxpayer receive a tax refund if they are currently making payments under an installment agreement or payment plan for a prior year's federal taxes?

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No.  As a condition of an installment agreement, any refund due to the taxpayer in a future year will be applied against the amount that they owe.

• The IRS will automatically apply the refund to the taxes owed.

• A taxpayer must continue making their installment agreement payments as scheduled and in full, because the refund is not applied toward the regular monthly payment; therefore any payments due under the installment agreement must still be made in full.

• Regardless of whether a taxpayer is participating in an installment agreement or other payment arrangement with the IRS, they may not get all of their refund if they owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support.

 

 

 

For head of household filing status, does the taxpayer have to claim a child as a dependent to qualify?

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In certain circumstances, a taxpayer does not have to claim the child as a dependent to qualify for head of household filing status; for example, a custodial parent may be able to claim head of household filing status even if he or she released a claim to exemption for the child.

 

 

 

A taxpayer  retired last year, and started receiving social security payments. Do they have to pay taxes on their social security benefits?

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Social security benefits include monthly retirement, survivor, and disability benefits. They do not include supplemental security income (SSI) payments, which are not taxable. The amount of social security benefits that must be included on a taxpayer’s income tax return and used to calculate their income tax liability depends on the total amount of their income and benefits for the taxable year.

To find out whether any of the benefits may be taxable, compare the base amount for the taxpayer’s filing status with the total of:

•  One-half of their benefits.

•  All of their other income, including tax-exempt interest.

 

The base amount differs depending on a taxpayer’s filing status. They are as follows:

•   $25,000 for single, head of household, or qualifying widow(er),

•   $25,000 for married filing separately and lived apart from your spouse for the entire year,

•   $32,000 for married filing jointly.

•   $-0- for married filing separately and live with their spouse at any time during the tax year.

 

If a taxpayer is  married and files a joint return, the taxpayer and their spouse must combine their incomes and social security benefits when figuring the taxable portion of their benefits.  Even if a taxpayer’s spouse did not receive any benefits, a taxpayer must add their spouse's income to theirs when figuring if any of the taxpayer’s benefits are taxable, if they file a joint return.

 

 

 

Married Filing Joint vs Married Filing Separate

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As with most tax related questions, the answers starts with “It depends.” First, the couple must be sure they are married according to Federal law.

For Federal taxes, a taxpayer is considered married if on the last day of the year they are married and living together. This includes same sex marriages recognized in the state where they were married, and common law marriages that are recognized in the state where they now live or in the state where the common law marriage began. Even if living apart, on the last day of the year  taxpayers are considered married if there is no legal decree of divorce or separate maintenance.

While some states have recognized same-sex marriages, partnerships, and/or unions for some time, the IRS only recently started recognizing legal marriages for same-sex partners.                                                                                                                                        

Many times the only way to determine the best way is to try both and compare the results.