Today TaxMama hears from Nora in the Tax Quips Forum with a common situation. “Two single taxpayers decide to share a home (let’s say a rental) and each has qualifying children. Each maintains their own family expenses and share equally the cost of household expenses. Can each claim HOH status? If so, would claiming two HOH with the same address flag the IRS?”
IRS does not like to see two heads of household in the same household. However, the scenario you describe is common – especially in today’s economy.
Here’s what I do. Since lots of addresses have multiple units at the same address, I treat the families as though they lived in separate units. In essence, they do, with certain common areas. So…use the same address, but add a UNIT NUMBER to the address. For instance,
1234 N. Main Street, Unit 101
1234 N. Main Street, Unit 102
Works just like an apartment number – and they each get to be head of household.
Incidentally, when I see earned income credits appear, I would take great care to ascertain that there really are two distinct families involved. IRS doesn’t take kindly to EIC fraud.
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