I’ll start with the standard disclaimer. You are not my Tax Attorney nor my accountant. I am not look for binding legal advice just a hint or pointing in the right direction.
Ok, here is the situation, I got divorced in 2006 and have FULL legal and physical custody of my 9 yr old daughter. My sister and mother have been very helpful in assisting me with being a single parent. I work afternoons M-F so my sister has my daughter Monday after school till Friday night (about 11pm). May or may not be relavent but I go there every morning to help my daughter and my 2 nieces get ready for school. Depending on my sister’s mood, I may or may not drive them to school.
Legally, my daughter’s address is the same as mine and there has not been anything set up in the courts giving my sister any legal rights. I have filled out emergency forms at the school for my sister to be contacted if I cannot.
She mentioned to me that she smight be able to claim my daughter on her taxes. Of course, that would mean that I could not claim my daughter and I do not want that to happen. My sister mentioned it last year around tax season but she did not do anything about it then.
She wants to bring it up with her tax preparer about the possibility and I need to know if I have to prepare to “fight” her on this. I do not want to create bad blood because I am so dependant on her to watch my daughter during the week while I work.
I pay my sister 150-200 dollars a month regardless if she has my daughter there (i.e. I took vacation when my daughter had her tonsils removed last year and had the week between Christmas and New Years off so my daughter stayed at home with me) For the 2009 year, I gave her a total of $2050 and I am not claiming it on my taxes as child care so she does not have to claim it as income.
If this is a possibility, I am thinking of trying to negotiate with her by offering her 10% of my return if I still can claim my daughter but I really need that money to pay off credit cards and other debt.
All the information I am finding on the IRS site are examples of non-custodial parents and single parents living with the child in the home of a relative.
This is mainly for Federal taxes. I usually use TurboTax and she uses a service (H&R Block I believe).