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Quick Guide: RapidTax CPA Review

Afraid to stray from your accountant but also tired of paying the fancy price tag?

I have some pretty fond memories of road-tripping to my parents’ accountant on a beautiful Spring afternoon. I’d wait on the black leather couch with nothing but a bag of pretzels and a Game Boy to keep me busy while they crunched numbers. By the time we were out of there, my parents were balls of frustration and I had lost my sunny Saturday.

RapidTax is here to save the day (and hopefully a few sunny afternoons of your own)! While many have now taken the modern road, preparing their own tax returns online, some of us have stayed in the accountant safety net. Change is hard, and we hear what you’re saying. That’s why we’re now offering you accountant services online with the RapidTax CPA Review service!

Why switch things up? Let’s take a look at the most common concerns when it comes to making the switch.

Is this really just as good as going to an accountant in person?

After doing some research, we’ve found that this is the dilemma holding people back the most from hopping aboard the online tax movement. Yes, it is just as good, if not better. In fact, one of the best parts is not having to go in person at all. Here are some other highlights to choosing an online CPA review with RapidTax: Continue reading “Quick Guide: RapidTax CPA Review”

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Who Determines Which Parent Claims a Dependent Child?

Claiming a dependent on your taxes can shave off a good amount of your tax liability.

Sometimes, the real issue lies in the rule that only one exemption can be claimed per dependent. This is an IRS rule, and one situation where absolutely no exceptions apply. So if there are two parents who are not filing jointly, and one child, you can see how this has all the makings of an impromptu game of tug-o-war.

So who wins? This question is asked to countless accountants, lawyers and tax professionals each day. The answer is simple. Accepting the answer is the tough part.

The custodial parent can claim the child as a dependent. The non-custodial parent cannot.

Who determines which parent can claim the child dependent exemption?

Contrary to popular belief, a court order will not determine which parent can claim a dependent child. You can wait on hold with the IRS as long as you want. The answer will always come down to federal law; not a state or county court order.

Custodial Parent VS. Non-Custodial Parent

Assuming your child probably refers to you as mom or dad, ‘custodial parent’ is typically not a term thrown around in most households. Generally speaking, the parent with whom the child lives for the majority of nights during the tax year is the custodial parent. The non-custodial parent is the other parent. If the child lived with each parent for the same amount of nights per year, then the custodial parent is the one with the higher Adjusted Gross Income. Continue reading “Who Determines Which Parent Claims a Dependent Child?”

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My Ex Claimed My Child as a Dependent; Now What?

You can’t divide a dependent exemption in half.

So, your ex claimed your child as a dependent on their tax return, when you were the only parent eligible to do this. Was it out of revenge? Maybe it was just miscommunication? Perhaps they believed they were actually allowed to? It happens. Regardless of the reason they did it, now you need to fix it and prevent this from happening in the future. RapidTax is here to help.

What will happen if I e-file my tax return?

You are the custodial parent of your child. Are you sure? To avoid confusion with the tax jargon I just threw your way, a custodial parent (for tax purposes, anyways) is the parent who the child lives with for the majority of nights per year. If both parents spent an equal amount of time with the child, then the parent with the highest adjusted gross income is the custodial parent (by default), according to the IRS. Keep in mind that determining who the custodial parent is does not depend on a state or county court ruling. For tax purposes, the IRS only considers federal law.

If both you and your ex e-file your tax returns and claim your child as a dependent, the one of you who filed second will be rejected by the IRS. This is inevitable. Even if you are the custodial parent, the IRS e-file system is a machine and you will still need to prove this.

What steps do I need to take to prove that I am the eligible parent?

The first thing to understand is that each tax situation is unique, and the best thing to do is contact the IRS directly for specific instructions on how to proceed. However, if you want a general idea of the steps you’ll need to take, keep reading.

Step #1: Double check that you meet all of the eligibility requirements set up by the IRS. This is important because if you do not meet even one of the following and your ex does, it could work against you. These requirements are: Continue reading “My Ex Claimed My Child as a Dependent; Now What?”