Frequently Asked Questions (FAQs)

Do I have to file a tax return?

This in itself is a complex question I have many Taxpayers ask me this question, by tax law if you make over $3,100.00 then YES you have to file. There are some cases in which you can make less and have to file, say if you have your own business or you want a refund of the taxes you paid at a job you worked and made less than $3,100.00.

I go to High School or College and have a job, do I have to file taxes?

Again YES you have to file taxes. Some Colleges will tell you that you do not have to file taxes (especially in the work-study program); THIS IS WRONG INFORMATION!!! You need to ask to have taxes taken out as I have had MANY students come to me and ask if they have to file and they have OWED money back to the IRS because the school did not takeout taxes. You may get a refund but be sure to tell your preparer that you might be able to be claimed by your parents. Your preparer should know the difference if they can or not.

 What is Interest Income?

Interest Income is interest you receive from bank accounts, insurance policies, U.S. Savings Bonds, tax refunds, money-market accounts, and T-bills. Your interest income is usually reported to you on a form 1099-INT.

 I receive Social Security, is it taxable?

If you receive Social Security (SS) or Social Security Disability (SSD) it might be… let me explain… if you make over a certain amount of income (all income) all or part of it becomes taxable. Usually the amount is $25,000.00 for Single, Head of Household, Married Filing Separately, or Qualifying Widow(er) and $32,000.00 for Married Filing Jointly. If you receive Social Security Income (SSI) It is Not Taxable.

I pay on my student loans is the interest deductible?

Yes, as long as it is a qualified student loan. The interest will be reported to you on a form 1098-E from the lender.

I recently moved, can I take off my moving expenses?

Yes, only if you meet the requirements. There are 3 tests that you have to meets to qualify. They are: 1.Your move is closely related to the start of work (within 1 year of start date). 2. You meet the distance test. (Over 50 miles) 3. You meet the time test. (If you are an Employee you must have or will work full-time for 39 weeks from the new location of your home with in a year. If Self-Employed you must work full-time 39 weeks in 12 months and continue to work full-time for 78 weeks in 24 months also you must work in the same general commuting area for all 78 weeks. Either way, whether an Employee or Self-Employed, you do not have to work for the same Employer for the whole time.) ACTIVE MILITARY ARE EXCLUDED FROM THE TIME TEST.

I pay for my children's college, what can I take off my taxes?

This is actually a complex question as you can either take a credit or you can take a deduction but not both. But the answer is YES either way as long as YOU paid the expenses. Up to $4,000 is deductible they include: Tuition and fees, room and board, books, supplies, and equipment, and other necessary expenses such as transportation. HAVE YOUR TAX PREPARER CHECK BOTH TO SEE WHICH IS BEST FOR YOUR SITUATION.

I am buying a house; can I take off my Mortgage Interest?

Yes, but where is determined on what you do for work and if you also rent any rooms, or apartments from the house. It could be divided and deducted from several forms depending on your situation. Ask your Tax Preparer about your specific situation. Many just use it as an itemized deduction in error so let them know your specific situation to avoid an audit.

 I buy my uniforms for work, can I deduct them?

Yes as long as they are only used for work and your employer does not reimburse you for them. Also your cleaning and upkeep can be deducted.

I have a second job. Will I pay a higher tax?

Not necessarily. Yes you will have a higher income but you can deduct certain items if you itemize on your tax form. You can deduct for stuff like: transportation to your second job, uniforms, anything that you have to buy that your employer does not provide for you.

I give to my church and charities, how much can I deduct?

You can deduct for anything that you tithe or give to charity although you may have an overall limit that you can deduct. Anything that is not cash may have a limit on it. Most cash gifts do not have a limit.

I owe for a defaulted student loan, is my spouse's refund safe?

If you or your spouse owes for a default student loan, child support, or any other debt that has a judgment against you; you can file a Form 8379 Injured Spouse Claim and Allocation (or Innocent Spouse Relief as Tax Preparers call it). What is does is give the IRS a chance to separate your income from your spouse’s so your spouse’s income will be counted as separate income from yours. ( although the IRS has aright to deny your claim).

How does the Earned Income Credit work?

The EITC is a refundable tax credit—a reverse income tax. Eligible families and individuals get money from the government that is not deducted from their paychecks. If you qualify; it is used to help to pay your tax and what is not used is refunded to you.

What is the Child Tax Credit?

The child tax credit is a credit that may reduce your tax by as much as $1,000 for each of your qualifying children. All rules for the CTC (Child Tax Credit) are the same as the EITC except the child has to be under 17.

I pay childcare is it deductible?

Yes, child care is deductible as long as you have: The provider’s name, Address, and Social Security Number or Tax Identification Number and the amount you paid for the year.

I already filed my taxes and received another W-2, what can I do?

You will need to file a 1040X Amended Return.

What is the American Health Care Act or Obamacare?

The Affordable Care Act was signed into law in 2010, and it has brought with it great change
to health insurance and the tax code. The law requires Americans and legal residents to
have health insurance. It provides for tax credits to help individuals pay for insurance,
depending on their income and family size. Those who do not have health insurance or a
coverage exemption must pay a penalty when they file their taxes. You must have health insurance or a coverage exemption, or you will pay a penalty.