"Adult" children living at home, how does it affect filing?

[dkak]

Will probably be filing December or January. Haven't spoken with an attorney yet. We are trying to find out how our children living with us is going to affect our number.

Daughter is 20, will be 21 when we file. She is a full time student and she works 20+ hours a week. She pays for her own schooling, car, phone, expenses, etc. and contributes nothing to the household bills.

Son is 19, he works out of town for four weeks then is home for two weeks. He pays his own personal expenses and contributes nothing to the household bills.

Is this going to complicate things? We will be below the median income for a household of two with my husbands income (I don't work). We would be WAY over the median for a household of four if we have to count the kids income.

We will not be speaking with an attorney until November, so would like find out what you guys think.

[jsofaz]

I can only tell you my experience. I am in Arizona (not sure if that matters). I have 4 adult children living at home. A couple of them work. A couple are unemployed at the moment. The ones that work pay their own expenses of course. None contribute to the household bills. My attorney counted all of them in our household. She did not count their income. She said that as long as they live in our home and do not contribute they can be counted in our household. She said that it may be questioned but to just answer that they do not contribute. Also, if it matters, we claim the ones that are unemployed on our tax returns, but not the ones that have jobs. We had no problems. Nothing was questioned. Our Chapter 7 was discharged July 28, 2010. Just tell your attorney your circumstances. He or she is the best one to advise you on this.

[dkak]

Thanks for your reply. I understand that I won't know for sure until I speak with an attorney, but knowing how it worked in your situation helps. I'll have to look at the numbers again, but I think being able to use the numbers for a household of four will put us closer to being able to file a 7.

[dkak]

If anyone else has info it would be greatly appreciated. Thx

[backtoschool]

Usually to claim household members you need to claim them as dependents on your income tax returns. As long as you have claim them on your taxes you can claim them as part of your household with no scrutiny from the trustee. If you want to claim someone as a dependent for bankruptcy purposes that you do not claim on your tax returns, then you need more documentation. The trustee will question your children's income and what they are contributing to household expenses, and you will have to show in more detail that they are contributing nothing. Expect close scrutiny of this if you are over the median, etc. Some trustees will include their income unless you can prove that they are contributing nothing. But in this economy unfortunately, it is becoming more common for adult children to be living at home so I think you will be fine as long as you have receipts, etc that show what they are costing you each month, etc....

[tcreegan]

household numbers

Hi dkak,

Some courts have ruled that you use the Census count ('heads on the beds')

As far as income/contributions backtoschool has posted tons on this (Hi backtoschool!)

And as always, different districts, different trustees do things differently. A local attorney will be your best help.

Tom in Colo

[momofthree]

I think you'll have issues claiming your son as part of the household since he supports himself and lives in the home only about 33% of the time. However, this is pure speculation on my part.

[drowning123]

I think dkak DOESN'T want to include the kids because their income will push the family over the median. Is that correct dkak? If you didn't claim them on your 2008 and 2009 taxes, don't worry about it. If you did, tell them that they're adults now and haven't lived with you in a year. Your son spends most of his time at work anyway. How can the trustee prove who lives in your house?

[dkak]

That is the situation as of now. It sounds like he will likely be laid off for winter, therefore, he will be home full time by the time we file.

Another question...if we will have to file claiming two persons in the household our dmi on I and J will be $600+. We only have one car because my husband has a company vehicle. We are charged monthly for his commute mileage and pay taxes on what they say the benefit of them providing the car is. If we bought another vehicle we would be at +/- $100 dmi. Does anyone know how the company car comes into play.

[dkak]

drowning...I want to claim them as members of the household, we pay all groceries, utilities, etc. DO NOT want to have to include their income. I know it sounds like I want to have my cake and eat it too, but this is actually the reality of our situation. I do not want to charge my kids room and board because we messed up, hoping to get them on solid ground when they leave the nest.

[drowning123]

I see. Unfortunately, you have to include their income. Trustee doesn't care where their money goes, it's still income. That's a tough one. What the trustee doesn't know, doesn't hurt him/her. You could say they're lazy good for nutten kids who won't go out and find jobs, and that's why you're in this situation. Total opposite, of course! LOL! Good luck.

[casablanca]

We have two "adult" kids, 20 and 22, we included them in our household size, but since they don't contribute financially to our household we did not have to include their income. We have not had our 341 meeting yet, though, so I don't know how it will all shake out. Our attorney says this is not an issue.

[backtoschool]

The trustee will expect documentation as to expenses, and the income will need to be included. You cannot use them as household member and not include their income, this will draw the attention of the US trustee, who will contest their inclusion in an attempt to put you into a chapter 13.