Ask the Advocate March 2020 Tax News
Helpful tips for your clients that file as HOH
Susan Maples, CPA
Taxpayers' Rights Advocate
Follow me on Twitter
March and April are definitely busy months for tax professionals and we know that you have less time available to read our monthly newsletter. For this reason, Tax News is usually lighter on content for these two months. Nevertheless, we don’t want you to miss out on something that may be important to you, so I want to briefly mention a few tips that may be helpful for your clients that file as head of household (HOH).
As you may be aware, beginning with tax year 2019 FTB has moved up its validation process for HOH filing status to when a return is filed. Historically, we reviewed HOH filing status well after the filing season, which led to refunds initially being issued only to be followed by an audit letter or billing notice. The new process allows FTB to determine the correct refund much sooner and also alerts taxpayers much earlier if they have made a mistake.
So what can you do to make this process go smoother for your HOH clients? One simple thing you can do is to double-check that all default and prepopulated (from year to year) lines or boxes are correct when completing the HOH filing information. Due to annual changes and updates in tax software, an FTB HOH form 3532 or filing questionnaire that was completed correctly in a prior year should still be reviewed when information from the earlier year is used for the current year’s return.
We have seen instances where an otherwise qualifying HOH filing status was denied because the tax software program used to prepare the return defaulted to “0” for the number of days the qualifying person lived with the taxpayer when in prior years the default number of days was “365.” Similarly, if your client’s qualifying person is a full-time student, take a moment to make sure that box is checked, even if you are using the same tax software as last year.
I know the frustration that an FTB notice can create for both you and your client, especially when you believe the return in question was completed correctly. By taking these few extra steps when preparing and filing your HOH clients’ returns you may be able to save yourself some time and effort during this busy time.