Frequently Asked Questions
Q: What is the minimum amount of taxable income that requires filing of a tax return?
A: For a single person, the income amount is $10,300. This is the sum of the standard deduction and the personal exemption. Dependents need to file if earned income is more than $6,300 or unearned income is greater than $1,040. Even if you do not have to file, you may want to file to receive money back from withholdings or from tax credits. Individuals must file if net earnings from self-employment income are $400 or more.
Q: What documents are needed to file an individual tax return?
A: To prepare you tax returns, we will need:
- A copy of your previous year’s tax return
- Form(s) W-2 (wages, etc.)
- Form(s) 1099 (interest, dividends, etc.)
- Schedule(s) K-1 (income/loss from partnerships, S corporations, etc.)
- Form(s) 1098 (mortgage interest) and property tax statements
- Brokerage statements from stock, bond or other investment transactions
- Closing statements pertaining to real estate transactions
- All other supporting documents (schedules, checkbooks, etc.)
- Any tax notices received from the IRS or other taxing authorities
Q: Is there an age limit on claiming my child as a dependent?
A: A child can be claimed as a dependent until age 19, or until age 24 if a full-time student. A child older than 19 can be claimed as qualifying dependent if the child’s gross income is less than $3700, is a member of the household, and receives more than 50% of support from the taxpayer.
Q: Can I receive a tax refund if I am currently making payments under an installment agreement or payment plan for a prior year’s federal taxes?
A: No. The taxing authority will apply any refunds to your current tax balance due.
Q: I retired last year, and started receiving social security payments. Do I have to pay taxes on my social security benefits?
A: The amount of social security benefits that must be included on your income tax return and used to calculate your income tax liability depends on the total amount of your income and benefits for the taxable year.
For Single and HOH returns: If combined income is between $25,000 and $34,000, up to 50% of benefits are taxable. If combined income is about $34,000, 85% of benefits are taxable.
For Joint returns: If combined income is between $32,000 and $44,000, up to 50% of benefits are taxable. If combined income is about $44,000, 85% of benefits are taxable.
(IRS Publication 915, Social Security and Equivalent Railroad Retirement Benefits)
Q: What types of work-related educational expenses are deductible?
A: Qualified work-related expenses are ones to maintain or improve your present job; deductible expenses include:
- Amounts spent on tuition, supplies, books, laboratory fees and similar items.
- Travel and transportation expenses to attend qualified educational activities may also be deductible.
(IRS Publication Itemized Dedications/Standard Deductions)
Q: When are medical expenses deductible?
A: Medical expenses paid for yourself and your dependents are deductible in excess of 10% of your Adjusted Gross Income.
Q: Should I take a deduction for business used of my home?
A: To qualify as a Home Office, the area must be used regularly and exclusively for business purposes. The business-use percentage of expenses such as mortgage interest, real estate taxes, rent, utilities, and house insurance can be deducted (some expenses are limited to the extent of business income).
Q: What do I do if I receive a notice?
A: Do not panic! Please fax, mail or email a copy of the notice to our office and we will follow-up with you. Many notices request additional information and are not actual tax bills.