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Filing Status and Number of Dependents: Federal Tax Return

I need an easy way to understand how to determine the filing status of the taxpayer and the number of dependents that a taxpayer can claim on his tax return. I have problems with head of household, qualifying widow with a child and married filing separately. Sometimes it is complicated to determine the number of dependents.

For example, John is divorced. He lived with his custodial 5-year-old son, his girlfriend and her two children who are ages 3 and 4 for all of 2007. The girlfriend does not work. She maintains the home and cares for the children. John supported all of them during 2007. Can John claim his girlfriend and her two children on his return as well as his son and himself? I believe since he paid more than half of the cost of keeping up a home for his son, he can file head of household.

Solution Preview

One would think the dependency rules should be simple, but I suspect the amount of abuse in the past has forced the rules to be very explicit. This part of tax law is clearly rules-based, and even in the real world, tax practitioners sometimes have to research issues regarding dependents.

There are some clues which will usually be correct:

1. Following the money spent (over half the support)
2. Following the time spent (over half the year)
3. Checking the legal relationship (must be a familial connection)
4. Checking the physical circumstances (in the same household)

Then there are a few special circumstances which may be ...

Solution Summary

The solution presents a short list of 4 rules useful in understanding about dependents. Special circumstances are mentioned that modify the 4 general rules. The special problem is explained next, plus a section on some of the issues relating to the married filing separate category.