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IRS Rules for Divorced Parents Claiming a Dependent

Parents who are divorced, separated, never married or live apart and who share custody of a child with an ex-spouse or ex-partner need to understand the specific rules about who may be eligible to claim the child for tax purposes. This can make filing taxes easier for both parents and avoid errors that may lead to processing delays or costly tax mistakes.

Only one person may be eligible to claim the qualifying child as a dependent.

Only one person can claim the tax benefits related to a dependent child who meets the qualifying child rules. Parents can’t share or split up the tax benefits for their child on their respective tax returns.

It’s important that each parent understands who will claim their child on their tax return. If two people claim the same child on different tax returns, it will slow down processing time while the IRS determines which parent’s claim takes priority.

Custodial parents generally claim the qualifying child as a dependent on their return.

  • The custodial parent is the parent with whom the child lived for the greater number of nights during the year. The other parent is the noncustodial parent.
  • In most cases, because of the residency test, the custodial parent claims the child on their tax return.
  • If the child lived with each parent for an equal number of nights during the year, the custodial parent is the parent with the higher adjusted gross income.

Tie-breaker rules may apply if the child is a qualifying child of more than one person.

  • Although the child may meet the conditions to be a qualifying child of either parent, only one person can actually claim the child as a qualifying child, provided the taxpayer is eligible.
  • People should carefully read Publication 504, Divorced or Separated Individuals to understand who is eligible to claim a qualifying child.

Noncustodial parents may be eligible to claim a qualifying child.
Special rules apply for a child to be treated as a qualifying child of the noncustodial parent.


More information:
Publication 501, Dependents, Standard Deduction, and Filing Information
Whom May I Claim as a Dependent?

Share this tip on social media — #IRSTaxTip: Claiming a child as a dependent when parents are divorced, separated or live apart. https://go.usa.gov/xJ7Kb

IRS sends CP2100 and 2100A Notices

In April, the IRS sent CP2100 and CP2100A notices to banks, credit unions, businesses or payers who filed returns that don’t match IRS records.

These information returns include:

  • Form 1099-B, Proceeds from Broker and Barter Exchange Transactions
  • Form 1099-DIV, Dividends and Distributions
  • Form 1099-G, Certain Government Payments
  • Form 1099-INT, Interest Income 
  • Form 1099-K, Payment Card and Third-Party Network Transactions
  • Form 1099-MISC, Miscellaneous Income
  • Form 1099-NEC, Nonemployee Compensation
  • Form 1099-OID, Original Issue Discount
  • Form 1099-PATR, Taxable Distributions Received from Cooperatives
  • Form W-2G, Certain Gambling Winnings

The IRS mails these notices out twice a year, in September and October and again in April of the following year. The notices tell payers that the information return they submitted is missing a Taxpayer Identification number or has an incorrect name or both.

Each notice has a list of payees with identified TIN issues. Payers need to compare the accounts listed on the notice with their account records and correct or update their records, if necessary. This can also include correcting backup withholding on payments made to payees.

The notices also tell payers that they are responsible for backup withholding. Payments reported on the information returns listed above are subject to backup withholding if:

  • The payer doesn’t have the payee’s TIN when making the reportable payments.
  • The payee doesn’t certify their TIN as required for reportable interest, dividend, broker, and barter exchange accounts.
  • The IRS tells the payer that the payee gave an incorrect TIN, and the payee doesn’t certify their TIN as required.
  • The IRS tells the payer to begin backup withholding because the payee didn’t report all their interest and dividends on their tax return.

Payers are responsible for the amount they failed to backup withhold and penalties may apply.

More information
Publication 1281, Backup Withholding on Missing and Incorrect Name/TINs

Tax Tips for Federal Withholdings | W-4

The most common reason why you may not received a tax refund when filing your taxes is because your withholding is wrong. This applies to most W-2 filers only. Getting your withholding right enables you to receive a refund. Below is what the IRS suggest you do to ensure you have selected the correct withholding.

All taxpayers should review their federal withholding each year to make sure they’re not having too little or too much tax withheld. Doing this now can help protect against facing an unexpected tax bill or penalty in 2023. The sooner taxpayers check their withholding, the easier it is to get the right amount of tax withheld.

Taxpayers whose employers withhold federal income tax from their paycheck can use the IRS Tax Withholding Estimator to help decide if they should make a change to their withholding. This online tool guides users through the process of checking their withholding to help determine the right amount to withhold for their personal situation. Taxpayers can check with their employer to update their withholding or submit a new Form W-4, Employee’s Withholding Certificate.

Adjustments to withholding
Individuals should generally increase withholding if they hold more than one job at a time or have income from sources not subject to withholding. If they don’t make any changes, they may owe additional tax and possibly penalties when filing their tax return.

Individuals should generally decrease their withholding if they qualify for income tax credits or deductions other than the basic standard deduction.

Either way, those who need to adjust their withholding must prepare a new Form W-4, Employee’s Withholding Certificate. They need to submit the new Form W-4 to their employer as soon as possible since withholding occurs throughout the year.

Individuals who should check their withholding include those:

  • who experienced a marriage, divorce, birth or adoption of child, purchase of a new home or retirement
  • who are working two or more jobs at the same time or who only work for part of the year
  • who claim credits such as the child tax credit
  • with dependents age 17 or older
  • who itemized deductions on prior year returns
  • with other personal and financial changes

Tax Withholding Estimator benefits
The IRS Tax Withholding Estimator can help taxpayers:

  • determine if they should complete a new Form W-4.
  • know what information to put on a new Form W-4.
  • save time because the tool completes the form worksheets.

Taxpayers should prepare before using the Tax Withholding Estimator by having their most recent pay statements, information for other income sources and their most recent income tax return. The tool does not ask for sensitive information such as name, Social Security number, address, or bank account numbers.

Taxpayers shouldn’t use the Tax Withholding Estimator if:

  • They have a pension but not a job. They should estimate their tax withholding with the new Form W-4P.
  • They have nonresident alien status. They should use Notice 1392, Supplement Form W-4 Instructions for Nonresident Aliens.
  • Their tax situation is complex. This includes alternative minimum tax, long-term capital gains or qualified dividends. See Publication 505, Tax Withholding and Estimated Tax.


More information:
Tax Withholding Estimator FAQs

Accountant | Tax Preparer for Uber or Lyft Drivers

I came across this post on FORUM uberpeople.net and commented on it. The questions asked on the forum is below.

 Discussion Starter · #1 · 

Any clues on how to find the best recordkeeping, tax filing advice? Key word search shows a lot of info on this from 2016. Bah-humbug. I’m thinking I might get a CPA’s help once, and see how they organize and arrange…and do my own work after. But maybe there are tax magicians to be found.

I save receipts and records, and am moderately educated on common deductions. I have been hammered with car expenses over and over and have not contacted the IRS at all this year (last year I did not earn enough to get a 1099 and just used TurboTax).

Perhaps I’m equipped to handle it on my own. I use Excel, although I’m kinda playing catch-up with logging everything and thinking my bookkeeping may not need to be as meticulous as I’m making it. I enter weekly earnings. I copy & paste fueling records from Speedway. I document mileage at every fill-up. My mileage is for sure 95% rideshare–maybe higher (I record exceptions)!

Not looking for app suggestions, by the way. I know the best rated ones and am not interested.

I’m not real big on traveling far from New Lenox/Mokena for help. But I suppose it’s a 1x or 2x consult and maybe there’s a real magician out there with Illinois-specific advice.

Here is our response:

Here is my advice. Coming from an Accountant, Tax Expert and a former Uber Driver.

Most of us drive ourselves to work and to other destinations. If we do not have a car, we use public transportation. There is a difference between driving yourself and driving as a Uber or Lyft driver.

Here is the difference

When we are driving ourselves, all we do is to sit at the wheel, turn on the engine and get going. We do not put any thoughts into what the rules of the road are. The rules are subconsciously programmed into our heads. That is, we start the engine and go to where ever we are heading. We stopped at the stop lights, stop signs, and signal left or right and get to where we want to go. That is so easy. It’s routine !!!

When I am driving for uber, I do much the same as above. The difference being is that I am more conscientious of the laws that governs driving. I tend to drive for Uber with my antenna up. I now know that have the responsibility of taking my passenger to his/her destination safely. The same applies to Do-it-Yourself taxes and have a Tax Expert do your taxes.

A Tax Professional is much more verse in the laws that govern preparing taxes. He or She can save you time and money. He or she has been trained to know what is allowable or not allowable. What is deductible or not deductible. For example, you can not say I made $50,000 driving and my expenses are $45,000. Like how do you support yourself? Are you married or single? What makes up the $45,000 allowable expenses?

That knowledge the Tax Preparer has comes from education, training and experience. You can not do taxes without knowing the ramifications and consequences of taking non-deductible expenses.

We can help you with your taxes.

We can help save you money and time.

We are Tax Experts. We are LA PREMIER Tax Service.

Call us (213) 418-9600 or set an appointment | FRIENDLY Tax Services (Accountants and Tax Preparers)

What Is a Tax Accountant?

Ok. So, you ask what a tax accountant is. The short answer, a Tax Accountant is someone who has been train in preparing income tax returns and is an Accountant. Thus, the term Tax Accountant refer to someone that specialize in the tax laws, rules, and regulations.

Ideally, a Tax Accountant training must include any of the following.

  • An Attorney
  • CPA – Certified Public Accountant
  • Enrolled Agent
  • Tax Practitioner

These are the four categories of people the IRS considers preparing taxes and represent their clients. The list of people practicing before the IRS is much longer. See Publication 947 (02/2018), Practice Before the IRS and Power of Attorney | Internal Revenue Service

However, a Tax Accountant must know tax laws as well as General Accepted Accounting Principles (GAAP). Sixty percent (60%) of tax filing deals with tax laws and the other forty percent (40%) deals with accounting.

So then, a Tax Accounting is someone with adequate knowledge of tax laws as well as General Accepted Accounting Principles. These two qualities are not mutually exclusive.

Friendly Tax Services

Friendly Tax Services is the premier income tax preparation firm for individuals, families, small business owners and the self-employed; Uber, Lyft, Taxi, and Limousine drivers; Actors, Independent Contractors and Entrepreneurs. We have empathy and understand the toll driving takes on Uber, Lyft, Taxi, and Truck drivers. That driving is time consuming. Uber drivers just don’t have the time it takes time to keep track of those business-related expenses.


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FRIENDLY Tax Services (Accountants and Tax Preparers)