Income Tax Dependency Rules for Children of Divorced Parents

JC Leahy, MA Accounting

For parents who are divorced (and also legally separated, or have lived apart for the last six months of the calendar year) these are the rules to determine who gets to claim the children as dependents..

Generally, the dependency exemption for children of divorced taxpayers will
go to the parent who has custody of the child for the greater part of the calendar year. Periods of custody are measured by the number of nights in which the child resided with the parent. When the child spends an equal number of nights with each parent, the parent with the higher adjusted gross income receives dependency exemption.

In addition, the child must have been in the custody of one or both parents for more than one half of the calendar year.

There are three exceptions to the rule that a custodial parent is entitled to the dependency exemption.
 

1. If there is a multiple support agreement that allows the child to be claimed as a dependent by a taxpayer other than the custodial parent, the multiple support agreement governs.
2. When the custodial parent agrees to let the other parent claim the child as a dependent for income tax purposes, the IRS accepts that.   The agreement must be in writing and attached to the non custodial parent's tax return for each year the exemption is released.
3. When a pre-1985 divorce decree or separation agreement grants the exemption to the non custodial parent and the non custodial parent provides at least $600 for the support of the child for the year

A word to the wise:  When there is confusion about who gets to claim the child as a dependent, the parent who filed his or her tax return FIRST has the "high ground" in that argument. :)

Identity Theft and Your Income Taxes

Identity theft protection: What is an IP PIN?

Do Yourself A BIG Favor!! Get Help With Your Income Taxes !!!!!!!

JC Leahy, MA Accounting

According to H&R Block, taxpayers who filled out their income tax returns last year without professional assistance left a billion dollars behind in unclaimed refunds and overpaid taxes!!   Do yourself a BIG favor this year and get it right when dealing with the IRS!!!!! JC Leahy has a Masters Degree in Accounting and 35 years' accounting experience. He has been focusing on income taxes for 23 years. He has a dedicated office in his home in Silver Spring/Colesville, Maryland. In this private and confidential setting, he will spend as much time as needed to "get it right" when filing your income tax returns. If you're not near Silver Spring, JC Leahy can also work with you long-distance.  Unlike certain tax-prep chain operations and franchises, when tax season has ended, if you have any questions or problems, JC Leahy will be readily available to help you throughout the year.

Make an appointment:  Phone JC Leahy and Company LLC at 301-537-5365. 

Income Tax Question: Are Bankruptcy Attorney Fees Tax Deductible?

By JC Leahy, MA Accounting

Twitter@TaxHelpWhenNeed

LOL!!  That's a good one!! No, attorney fees related to bankruptcy are not tax deductible.  The only exception is if the bankruptcy attorney prepares your tax return, the portion of the attorney fees for tax return prep is tax deductible on your Schedule A as a miscellaneous itemized deduction subject to the 2% of Adjusted Gross Income threshold

Get Your Annual Free Credit Report -- Check For Signs of Identity Theft

Fed law entitles you to one free copy of your credit report each year.

The government approved website for getting your free credit report is:

FREE CREDIT REPORT

 

From the In Box: A History of Social Security

An E-Mail "forward" submitted by Josh Dee, MD

Subject: History Lesson on Your Social Security Card

  

Just in case some of you young whippersnappers (and some older ones) didn't know this. It's easy to check out, if you don't believe it.  Be sure and show it to your family and friends. They need a little history lesson on what's what and it doesn't matter whether you are Democrat or Republican. Facts are Facts.
Social Security Cards up until the 1980s expressly stated the number and card were not to be used for identification purposes. Since nearly everyone in the United States now has a number, it became convenient to use it anyway and the message, NOT FOR IDENTIFICATION, was removed.[9]

An old Social Security card with the "NOT FOR IDENTIFICATION" message.
Our Social Security 

Franklin Roosevelt, a Democrat, introduced the Social 
Security (FICA) Program. He promised: 

1.) That participation in the Program would be 
Completely voluntary, 

No longer Voluntary 

2.) That the participants would only have to pay 
1% of the first $1,400 of their annual 
Incomes into the Program, 

Now 6.20% on the first $117,000 of salary or wages

3.) That the money the participants elected to put 
into the Program would be deductible from 
their income for tax purposes each year, 

No longer tax deductible 

4.) That the money the participants put into the 
independent 'Trust Fund' rather than into the 
general operating fund, and therefore, would 
only be used to fund the Social Security 
Retirement Program, and no other 
Government program, and, 

Under Johnson the money was moved to 
The General Fund and Spent 


5.) That the annuity payments to the retirees would never be taxed as income. 

Under Clinton & Gore 
Up to 85% of your Social Security can be Taxed 

Since many of us have paid into FICA for years and are 
now receiving a Social Security check every month -- 
and then finding that we are getting taxed on 85% of 
the money we paid to the Federal government to 'put 
away' -- you may be interested in the following: 

------------ --------- --------- --------- --------- --------- ---- 

Q: Which Political Party took Social Security from the 
independent 'Trust Fund' and put it into the 
general fund so that Congress could spend it? 

A: It was Lyndon Johnson and the democratically 
controlled House and Senate. 

------------ --------- --------- --------- --------- --------- --------- -- 

Q: Which Political Party eliminated the income tax 
deduction for Social Security (FICA) withholding? 

A: The Democratic Party. 

------------ --------- --------- --------- --------- --------- --------- ----- 

Q: Which Political Party started taxing Social 
Security annuities? 

A: The Democratic Party, with Al Gore casting the 
'tie-breaking' deciding vote as President of the 
Senate, while he was Vice President of the  US 

------------ --------- --------- --------- --------- --------- --------- - 

Q: Which Political Party decided to start
giving annuity payments to immigrants? 

AND MY FAVORITE: 

A: That's right! 

Jimmy Carter and the Democratic Party. 

Immigrants moved into this country, and at age 65, 
began to receive Social Security payments! The 
Democratic Party gave these payments to them, 
even though they never paid a dime into it! 

------------ -- ------------ --------- ----- ------------ --------- --------- 

Then, after violating the original contract (FICA), 
the Democrats turn around and tell you that the Republicans want to take your Social Security away! 

And the worst part about it is uninformed citizens believe it! 
If enough people receive this, maybe a seed of 
awareness will be planted and maybe changes will 
evolve. Maybe not, some Democrats are awfully 
sure of what isn't so. 

But it's worth a try. How many people can YOU send this to? 

Actions speak louder than bumper stickers. 

Avoid IRS Income Tax Audit !!!!!!

Eight tips to avoid an IRS income tax audit