Good Essay On Federal Income Tax Accounting

Bridgestone Accounting Firm

111 Main Street

New York NY 20041

+12087654356
141 Mockingbird Lane

Maple Heights, MI 48520

Dear Mrs. Cathy,
It is with great urgency and special attention that we have received your request for our esteemed advice with regards to your tax situation. Upon critical evaluation of the whole situation, we would like to offer our limited advice as follows;

Facts

First, it is crucial to note that you have been providing more than half of the household support. However, since Lily graduated from high school, she has been earning quite a reasonable amount which could have allowed her to provide support for herself. However, we do acknowledge that she is planning to enroll in a college in 2015 and hence that will leave you again as the sole breadwinner. Your mother-in-law, on the other hand has been earning quite some negligible amount from non-taxable income, and this is not expected to improve anytime soon.
Secondly, it is crucial to note that your husband, Greg, left and cannot be traced and hence does not provide any support for the household. Moreover, in the postcard he sent, he categorically stated that he is planning to claim both Lily and Joan as dependants of his own tax return.

Federal Income Tax Law Applicable

The Internal Revenue code provides that a personal exemption tax be deducted from a person’s federal income tax. This deduction is composed of the sole taxpayer, her spouse as well as her child.
It is legally allowed to claim a personal exemption for your own self, your own qualifying dependants, and for a spouse in case he or she has no gross income or the couple files separately. Moreover, it is also possible to claim exemption should the spouse be independent of another.
Finally, it is advisable to note that once a taxpayer is claimed as dependent, he or she cannot be in a position to claim a personal exemption for him/her self.

Solution/Advice

Based on the above facts, the following systematic solution would be the most applicable;
1. It is of your best interest to continue filing separately since your husband is nowhere to be traced.
2. Since the situation dictates that you will continue being the bread winner for an unspecified period of time, it is very advisable to file a case blocking your husband, Greg, from claiming Lily and Joan as dependants of his own tax return.
3. It is then advisable to file your own federal income tax return claiming your own personal exemption, that of your spouse, Greg, and that of your dependants (Lily and Joan).
Thank you for considering our esteemed firm for a substantial, comprehensive advice. Feel free to seek clarification or help where need be.
Sincerely

James Brandon

Operations Manger/Legal Advisor