01/09/2025
HEAD OF HOUSEHOLD FILING STATUS
As we know that tax preparers can be fined $635 for not performing due diligence for EIC purposes.
👉🏾What does due diligence consist of for this credit:
A bill with their name and same address
Or due diligence questions in the file
Or due diligence questions on your intake form
👉🏾What are some sample due diligence questions for head of household
👉🏾Were you unmarried or considered unmarried on the last day of the tax year?
👉🏾Did you live separately from your spouse for at least the last six months of the tax year (if legally married but separated)?
👉🏾Are you legally divorced or widowed?
👉🏾Did you pay more than half the cost of maintaining your home during the tax year?
Costs include rent, mortgage interest, property taxes, utilities, maintenance, food, etc.
👉🏾Can you provide records (receipts, bills, etc.) to show that you contributed more than 50% of the household expenses?
👉🏾Did a qualifying person live with you for more than half the year?
If not, are you claiming a dependent parent who didn’t live with you but for whom you provided significant financial support?
👉🏾Is the dependent related to you (e.g., child, parent, sibling, or other qualifying relative)?
👉🏾Does the dependent meet the IRS support test (i.e., they didn’t provide more than half of their own support)?
👉🏾Did you and the dependent live in the same home for more than six months of the year?
If not, do you have legal or formal custody arrangements that impact where the dependent lives?
👉🏾Were any other adults contributing financially to your household during the tax year?
Hope this help and be sure to comment below additional questions you may include in your file