“We plan to get married, will my income then come into play towards that figure?”---->I guess so;then you can claim, in your joint return, her kids as your qualifying child(ren)/qualifying relative(es) as long as she is the kids’ custodial parent. By filing a joint tax return, bothof you report all your income, deductions, and credits. Both spouses must sign the return, and both spouses accept full responsibility for the accuracy and completeness of the information reported on the tax return. The IRS cautions, Both of you may be held responsible, jointly and individually, for the tax and any interest or penalty due on your joint return. One spouse may be held responsible for all the tax due even if all the income was earned by the other spouse.
“Also, if we stay unmarried, and she and the kids live with me for the entire year, and she stays unemployed, I know I can claim them, but how will it work for the children, if the bio father is claiming them?”---->In this case, you can NOT file your return as head of ho--->se hold status as her kids are NOT your qualifying children/qualifying relatives. However, on your return you can claim totally 4 exemptions; you, your GF and her two kids. Since you provided more than half of your GF's/her kids’ support and she had $0 income and she lived you all year , she(her kids are) is your qualifying relative and entitles you to a $3,650 exemption for 2011. Since you can claim the mom's(your GF) exemption, the kids are NOT qualifying children to the mom and they are NOT qualifying children to the bio dad as you are the one who met the support test for both your GF and her kids. As soon as she is a dependent, she can't have dependents of her own or claim EIC. If she actually files for EIC, you can't claim her. Generally, only the custodial parent, I guess your GF, is eligible to claim some tax breaks. However, the custodial parent can waive her right to claim the dependents in favor of the non-custodial parent. The non-custodial parent, the bio-father, would then be able to claim the dependents’ personal exemption. Even after releasing the claim to a dependent, the custodial parent would still be eligible to claim the following child-related tax benefits: head of household filing status;child and dependent care tax credit ;earned income credit, and exclusion for dependent care benefits.The biggest hassle will be if the dad tries to claim the kids when he doesn't meet the support test. The IRS won't allow 2 taxpayers to claim the same children. If he files first, then you will have to file on paper. If you both claim the kids, you will get mail from the IRS. The first letter will ask for both you and the dad to check your records and whomever is wrong to file an amended return. The second letter (when no 1040X shows up) will ask to see your records showing that the children lived with you and you provided 51% of the support. Once you provide these, the IRS will fix the other return.
Last edited by Wnhough : 01-21-2012 at 02:17 AM.