Walter and Nancy provide 60% of the support of their daughter (age 18) and son-in-law (age 22). The son-in-law (John) is a full-time student at a local university, while the daughter (Irene) holds various part-time jobs from which she earns $11,000. Walter and Nancy engage you to prepare their tax return for 2017. During a meeting with them in late March 2018, you learn that John and Irene have filed a joint return. What tax advice would you give based on the following assumptions: a. All parties live in Louisiana (a community property state). Who can Walter and Nancy claim as dependents?
What significance does filing a joint return have on exemptions?
The joint return test _ _ _ to the qualifying child and qualifying relative categories of _ _ _ exemptions.
Indicate whether the following options could rectify the situation. Select "Yes" or "No" whichever is applicable.
1. If they could document the reason for filing a joint return was to claim a refund for tax withheld, no tax liability exists for either spouse on separate returns and neither spouse is required to file a return.
2. If John or Irene amend their return and file separately before April 16, 2018.
3. There is nothing that can be done since the return has already been filed. If John and Irene had not filed a joint return, who could Walter and Nancy claim as a dependent?
b. All parties live in New Jersey (a common law state).
The joint return problem _ _ _ be resolved.
If John and Irene had not filed a joint return, who could Walter and Nancy claim as a dependent?