Question on filing status

[makeugohmmm]

What is the name of your state (only U.S. law)? MN

I have been staying with my parents for most of 2014 while searching for a home to purchase. Pickings are slim. I live here with my two children. Even though I live here, I pay for everything that my children need, (food, clothes, daycare, school stuff, everything) I maintain their health insurance. My parents have been overly kind and allow us to stay rent free.

I want to do my taxes correctly. Can I still file head of household for me and my two kids? Or does the fact that we live rent free in my parents home make that wrong? Everything I read says that I must pay for more than 50% of maintaining the home...I don't pay for the rent but I pay for everything else which would add up to way more than 50%. Truthfully, the difference is only a few hundred dollars either way but I want to be correct to protect myself from an audit and also to protect my parents from an audit. Let me know if you need any more info.

 

[davew128]

I'm honestly not sure you could possibly say that "everything else" would add up to more than the cost of rent. I think you're confusing dependency rules with Head of Household rules. I can see you providing more than 50% of the kids support. I can't possibly see how you're providing more than 50% of the cost to maintain the home.

 

[makeugohmmm]

Follow up

OK, but what makes a "household". My parents can't claim me or my children as their dependents since they don't provide at least 50% of our support. So wouldn't that make my kids and I a "household" for tax purposes? What if I lived with another family, not my parents? Or what if my parents house was paid off and there was no mortgage? Or, what if we were homeless? Or lived in a van with no rent payments? Is rent really what makes a household?

Follow up point, the amount I pay for daycare alone far exceeds the rent/mortgage. Add to that food, clothes, school expenses and anything else the kids need, I would say it far exceeds the 50% rule

 

[LdiJ]

OK, but what makes a "household". My parents can't claim me or my children as their dependents since they don't provide at least 50% of our support. So wouldn't that make my kids and I a "household" for tax purposes? What if I lived with another family, not my parents? Or what if my parents house was paid off and there was no mortgage? Or, what if we were homeless? Or lived in a van with no rent payments? Is rent really what makes a household?

Follow up point, the amount I pay for daycare alone far exceeds the rent/mortgage. Add to that food, clothes, school expenses and anything else the kids need, I would say it far exceeds the 50% rule

You could definitely file single, claim your children, and claim all tax attributes for the children. The question is whether or not you can claim head of household. It IS possible to have two households under the same roof (think two roommates, both with children, equally sharing all rent and utilities), however in your case, it probably is not possible because you have not paid any of the costs of maintaining the home.

Since you are only talking about a couple of hundred dollars, I would recommend that you just file as single.

 

[davew128]

Follow up point, the amount I pay for daycare alone far exceeds the rent/mortgage. Add to that food, clothes, school expenses and anything else the kids need, I would say it far exceeds the 50% rule

let me repeat myself: You're confusing dependency rules with HOH rules. Daycare is not a cost of maintaining the household. Household costs are housing, food, utilities, property taxes, repairs. Clothing, day care, schooling etc are not HOUSEHOLD costs.