Question

traver (32) is not married. He shares a home all ting him. Travor provides more then year with his girlfriend Stepphanie (26) , Stephanie son Ryan (3). Rayan is not related to Travor, and travor is not in the process of adopting him. Travor provides more then half of the cost of maintaning the home and more then 50% support for stephanie and ryan. Travor's wages were $26,575; stephanies gross income was $4050, ryan is $0. what is travers most advantageous filing status?

a head of household

b married filing jointly

c married filing seperate

d single

Answer 1

Ans d) Head of the Household

Since Traver is not married he cannot file under Married Filing jointly or married filing seperate. Now coming to filing as an Head of the household which is advantagous for the tax payer amongst the other status mentioned in the question. As when a tax payer qualifiy to pay tax under head of the household. He/she end up geting higher standard deduction and lower tax rate as compared to other filing status. But in order to qualify under head of the household, a tax payer need to fulfill certain condition or tests. which is as below:

- A person should be unmarried i.e. not married on the last day of the tax year and

- a person end up paying more than half of the cost of maintaining the home and

- a person had a qualifying person living in their home for more than half of the year.

There are two types of qualifying person for claiming the status of head of the household.

Qualifying child

- The child must be tax payer's biological child, foster child, sibling, step child or a decendent.

Now in the above case since Ryan is not traver's biological child or a foster child or even a step child as Trever is not married, Ryan cannot be considered as qualiflying child for head of the household status.

Qualifying Relative

A qualifying relative would be a person who lived as a member of the household for a entire year. Or the person is related to tax payer under definition of relative as per IRS. The Gross Income of the relative is less than $ 4050 in the last year.

In the present case since stephanies gross income was $ 4050, she cannot be considered as Qualifying Relative. With respect to as already mentioned above Ryan cannot be considered as qualifying child for Traver as he is not related to traver but Ryan would be consider as Qualifying Relative as her mother Gross income is below the filing requirement as per IRS. Hence she doesn't need to file a tax return. Consequently Ryan is not treated as Qualifying child for Stephneis. In such a scenario Ryan is passes all the test with respect to residency and suppor, he can be considered as Qualifying Relative of the Trever.

Hence Trever can file tax return as Head of the Household as the most advantagous filing status.