Let me set the stage: A man and woman meet in high school and are married soon after graduation. Wife works a few part time jobs before becoming a stay-at-home mom. Husband continues to work in construction as an Independent Contractor for the next several years while Wife raises their 3 children. Husband was responsible for all financial affairs on behalf of the family. Wife is given a monthly allowance and runs any large purchases by Husband first. She has no idea how much money Husband makes, how much money they have in the bank, etc. Many years down the road, Husband decides to divorce Wife and leaves her with nothing. Just as she feels she's built up a new life on her own- got a job, opened her own bank account, rented her own apartment, etc- BAM! The IRS begins garnishing her wages for a tax debt incurred during her marriage because Husband was not filing and paying in taxes throughout the years.
With tax season in full swing, I find that more and more of our tax resolution clients turn to us for quick advice on how to properly prepare their income tax returns. (Rightfully so- filing and paying your taxes timely is a MUST when trying to resolve any back tax balances!) One of the most common questions I get is, "Who can I claim on my tax return?" With blended families becoming more and more common, it's easy to be confused on who you can claim as a dependent on your income tax return, so here are some tips!
President Obama's most recent federal budget proposal shows his intent to eliminate what has been termed a loophole in the tax laws regarding donations, specifically, the tax deduction allowed for donations that are required by universities for the opportunity to purchase season tickets for college sports.