 Hello and welcome to the session in which we would look at five different scenarios for Arthur in which we determine What is the best filing status for Arthur now? This could appear as a CPA Simulation on the CPA exam This could be an exercise in your college course on the CPA exam It might look something like this and you might have a drop-down box where you would select for example single Or you would select something like head of a household or whatever the filing status you think that fits that of Arthur So it's very important to understand the filing status in the prior session I explain all filing status in this session. We will try to Practice we will try to work and exercise why the reason you do so is to test your knowledge Do you do you understand what we did in the lecture now test your knowledge? Well, it might clarify certain topics or it might say great It's confirming what I understood this correctly and you could move on. Let's go ahead and get started Arthur lives alone, but he supports a household where his elderly mother lives His mother meets the criteria to be considered his Heard his dependent, but his father does not so he supports his mother His mother is his dependent. She lives in another home What his mother qualifies him as a head of a household so since he's not married His two options are single head of a household. We're not told he's he lives alone Okay, so with his mother That she's living in another house Qualify him although his father does not qualify and the answer is yes as long as one of the parents qualify Arthur will Be able to claim head of a household filing status Before we proceed any further. I have a public announcement about my company farhat lectures dot com Farhat accounting lectures is a supplemental educational tool That's going to help you with your CPA exam preparation as well as your accounting courses My CPA material is aligned with your CPA review course such as becker, roger, wily, gleam, miles My accounting courses are aligned with your accounting courses broken down by chapter and topics My resources consist of Lectures multiple choice questions through false questions as well as exercises Go ahead start your free trial today Arthur lives alone. He still lives alone, but he maintain a household Where his daughter maria and maria's husband Ingrid's son-in-law live both maria and her husband qualify as his dependent Well, Arthur is not married. So what's his options single head of a household? Can he file ahead of a household? Well, let me tell you Arthur is a pretty generous person But the exception applies to the parents. So since his daughter does not live with him Now if his daughter and son-in-law they live with him in the same household He will be able to claim head of a household You might be saying but his mother did not. Yes, there's an exception for parents, but not anyone else not kids Let's take a look at the third scenario Arthur maintains a household where he and his close friend steven live Steven meet the requirement to be considered a dependent. Well, so again Arthur is single It's either single or a head of a household now. We are told that steven is a dependent However, you have to understand for the purpose of a household qualification The relationship test has to be met and member of a household which is Steven is a member of a household does not get you to the household filing status So a dependent. Yes, we are told Steven is a dependent, but there is no relationship You might be saying but they live together. It's a household. It's They are part of a member of the same household. Yes, they are But that relationship does not apply and gives you head of a household status therefore Arthur will have to file as a single Arthur maintains a household where he lives with his mother-in-law That's fine. Arthur why Arthur wives passed up in the prior year? Well, let's see So he his he was married his let's assume. This is this is year 20 x 3 His wife passed away in 20 x 2 so we're looking at 20 x 3 What are his options? What are Arthur's option? Well Since his wife passed away, what happened is this you could either go back to single or qualify widow or widower If your spouse passes away to qualify as a to qualify as a qualify widow or widower you have to have a child So he doesn't have a child. So that's out. He lives with his mother-in-law Maintain a household now. We are not told that his mother-in-law is his dependent Okay Well, if we assume that his mother-in-law is his dependent Then head of a household. Why? Because the relationship do exist under those circumstances. There's a relationship In-law son-in-law mother-in-law those are those exist But we cannot make this assumption if we cannot make this assumption Arthur will default back to single Okay, qualify widow or widower. No no dependent child as long as As long as his mother-in-law is a dependent She meets the relationship test. He will be head of a household, but we cannot make this assumption here. Therefore His status is Single back to single Now let's assume change the scenario Arthur's wife disappear rather than pass away So let's assume since since 20x2 his wife basically disappeared ran away. Well, what would happen? Well, he's married When you're married, you could either married filing jointly married filing separately because his wife Does not does not live with him now. There's another option. There is the abandoned spouse type of situation Well, yes, the abandoned spouse were applied, but you need a child as well. There is no child still married Abandoned spouse doesn't apply. There is no child because the mother-in-law cannot be considered a child therefore His only option is married filing separately, which is Disadvantageous disadvantageous status, but that's what's available for them What should you do now to understand filing status? You gotta go to far hat lectures. Look at the lectures. Look at additional exercises multiple choice through false That's gonna help you understand this topic whether you are a CPA exam candidate Whether you are an enrolled agent Candidate studying for the enrolled agent exam or you are an accounting student invest in your career invest in yourself Good luck. Study hard and of course stay safe