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Just wanted to add my experience as a tax preparer. This situation comes up ALL the time with my divorced clients. Here's what you need to know: The "more than half the year" requirement for a qualifying person gets tricky with 50/50 custody. However, when your divorce decree specifically states which parent claims which child for tax purposes, the IRS generally accepts that as establishing which child is your "qualifying person" for HOH purposes. The key thing: make sure your custody agreement/divorce decree EXPLICITLY mentions the tax arrangement. If it's crystal clear in writing, both parents can claim HOH with different qualifying children. If it's just a verbal agreement, you might run into problems.
What about the tiebreaker rules though? I thought those only applied to which parent can claim the child as a dependent, not for determining Head of Household status?
You're right that the tiebreaker rules primarily address who can claim a child as a dependent. However, for HOH purposes, those same determinations become relevant because you need a "qualifying person" to claim HOH status. When a divorce decree specifically assigns which child each parent can claim, it establishes who each child is a qualifying person for. The IRS generally respects these legal agreements as the controlling factor, even with exactly 50/50 physical custody. Without such an agreement, you'd fall back to the regular tiebreaker rules, which would eventually come down to the higher AGI parent if everything else is equal.
Quick warning - the IRS is really cracking down on incorrect HOH claims from divorced parents! I know several people who got audited last year specifically on this issue. Make sure you have documentation showing: 1) You provided more than half the cost of keeping up your home 2) Your child lived with you at least 183 days 3) Your divorce decree specifically stating which child you claim If you can't prove these (especially #2 with 50/50 custody), consider filing as Single to avoid potential headaches. The IRS has been particularly picky about the "more than half the year" requirement lately.
One thing nobody mentioned yet is that the rules are different for the different education tax benefits. For American Opportunity Credit, room and board are NOT qualified expenses, but for the Lifetime Learning Credit, certain housing costs CAN be if they're required fees paid directly to the institution. Check if your university housing is required for your program. Some graduate programs require on-campus housing for first-year students, which might change how it's treated. Also, don't forget that required textbooks and supplies are qualified education expenses, even if purchased somewhere other than the university bookstore!
Does this mean I should be keeping all my textbook receipts? I spent like $900 on books this semester but wasn't planning to include that since it's not on my 1098-T. Can I actually claim that?
Yes, absolutely keep all your textbook receipts! The IRS specifically states that required textbooks are qualified education expenses for tax credits, even though they don't appear on your 1098-T. For the American Opportunity Credit in particular, required books, supplies and equipment are qualified expenses even if you don't buy them from the school. Just make sure you can verify they were required for your courses - having the syllabus that lists required materials is good supporting documentation.
For anyone struggling with 1098-T and education expenses, don't forget to check Box 1 vs Box 5 on the form! Box 1 shows payments RECEIVED by the school, while Box 5 shows scholarships/grants. If Box 5 is higher than Box 1, you technically received a refund of excess financial aid that might be taxable income depending on how you used it.
This just confused me more. My Box 5 is higher than Box 1 because I got more aid than my tuition cost, and they refunded the extra to my bank account, which I used for apartment rent. So is that taxable or not??
The 1098-T is so confusing because some schools report in Box 1 (payments received) and others use Box 2 (amounts billed). My school uses Box 2 and leaves Box 1 empty, which makes calculating everything a nightmare.
I used Jackson Hewitt last year and had a terrible experience. The preparer didn't understand how to properly deduct my business expenses and I ended up overpaying by about $1,200. I found this out when I had another preparer review my return this year who pointed out all the mistakes. They missed home office deductions, didn't properly calculate my mileage, and completely botched how they handled my inventory. Don't assume all tax preparers are equal - my Jackson Hewitt person was clearly undertrained but acted super confident. I'd definitely recommend asking a lot of questions about their experience with Schedule C before committing.
That's exactly what I'm afraid of! Did you try to get them to fix the mistakes or file an amended return? I'm wondering if they stand behind their work when they mess up.
I did contact them about filing an amended return, but they wanted to charge me an additional fee for it even though the mistake was theirs. Their "accuracy guarantee" only covered penalties and interest if the IRS found an error, not money I overpaid due to their mistakes. That's when I switched preparers entirely. If you do go with Jackson Hewitt, get everything in writing about what their guarantee actually covers. Also ask to see a draft of your return before they file it and review the Schedule C thoroughly. Look especially at whether they've included all possible deductions like home office, business percentage of internet/phone, mileage, etc.
Just a different perspective - I've used Jackson Hewitt for 3 years for my small woodworking business and W-2 job, and they've been great. I think it really depends on the specific office and preparer. My guy is actually an enrolled agent who's been doing returns for 15+ years, and he's found deductions I never would have known about. The $225 price point is actually pretty standard for a return with Schedule C. H&R Block quoted me $275 for similar services. The key is finding a specific preparer you trust, not just walking into any location.
Do they offer any kind of audit protection? TurboTax charges extra for that and I'm trying to figure out if it's worth it.
has anyone actually tried calling the IRS Taxpayer Advocate Service? i heard they can sometimes help with these kinds of issues and its free, unlike some of these services people are mentioning
I tried the Taxpayer Advocate last year for a different issue. They're helpful but extremely overwhelmed. Took 3 weeks just to get assigned to someone, and then another 2 weeks for them to call me back. They're really meant for hardship situations or cases where you've already tried normal channels multiple times.
My tax preparer made a similar mistake last year. I called them and THEY fixed it for me since it was their error. Have you tried going back to your preparer? Most have some kind of guarantee and will handle the amendment process for free if they messed up.
Daryl Bright
Don't forget that you need to maintain a tax home somewhere to claim these travel expenses! If you're just working in different locations with no fixed base of operations, the IRS might consider you an itinerant worker and disallow all your travel deductions. Make sure you actually have a main place of business or regular work location.
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Sienna Gomez
ā¢Could you explain what qualifies as a "tax home"? I thought it was just where you live, but it sounds like you're saying it's different. If I live in one state but do 75% of my work in another state, where's my tax home?
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Daryl Bright
ā¢Great question! Your "tax home" isn't necessarily where you actually live - it's your regular place of business or work, regardless of where your family home is located. If you do 75% of your work in another state, that other state would likely be considered your tax home for tax purposes, which means travel there wouldn't be deductible. To deduct travel expenses, you need to be traveling away from your main place of business temporarily. The IRS generally considers "temporary" to be assignments expected to last less than one year.
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Kirsuktow DarkBlade
Has anyone used the IRS per diem app or is there a better app to track all this stuff? I'm terrible at keeping receipts but don't want to miss out on deductions.
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Abigail bergen
ā¢I've been using Expensify for tracking my business travel. It lets you log per diem meals separately from your actual receipts for lodging. Super helpful for keeping everything organized for tax time.
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