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Tax law and codes are constantly changing. Following are the questions that are most often asked of our tax preparation experts. If your question is not answered here please call or email us for assistance.
When is the due date to open an IRA account?
Until April 15, 2003
My spouse owes Child support from his previous marriage and the IRS is taking my portion of the refund. What can I do to not be penalized? You need to file an Injured Spouse Claim to request your portion of a joint refund.
My son is 30 years old and he is not working right now. Can I claim him as a dependent? As long as your son meets the following five dependency exemption tests, you may claim him:
My Grandmother left me as beneficiary of her Life Insurance and I received an inheritance of $10,000. Do I have to pay taxes? Inheritance is not included in your income. However, if after you receive it, you produce income such as interest and dividends, that income is taxable to you.
I am receiving alimony payments from my former husband. Is this money taxable?
Yes. Alimony is taxable for the person receiving the income and it is deductible for the person that pays it.
I am paying for child support. Can I deduct it? No. Child support is not a deduction.
I withdrew money from my 401(k) plan. The company already withhold taxes. Do I need to report that?
Yes. If you took a distribution prior to reaching age 59 1/2, you will also need to pay a 10 percent additional tax on early distributions from qualified retirement plans unless you qualify for an exception.
My son's education expenses were paid by a school loan that will begin payments in the year 2006. Can he still qualify for the Hope or Lifetime Learning Credits? Yes. The education credit is claimed in the year in which the expenses are paid, not in the year in which the loan is repaid.
I am single and I only made $1,000.- on income this year working as a self-employee. My friend told me that since I am single and I made less than $7,700.- I do not need to file taxes. Is this true? No. Self-employees need to file income tax if they made $400.- or more. There are some benefits that could be missed if you don't file. Individuals who don't earn enough to be required to file a tax return may be eligible for an earned income credit up to $2,506 for a taxpayer with one qualifying child and $4,140 for a taxpayer with two or more qualifying children. Some individuals who do not have a qualifying child may be eligible for a credit of up to $376. However, you must file a return to receive the Earned Income Tax Credit. You must also file a return if you received any advance payments of this credit while you worked during the year.
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Copyright © [2002] [A+ Tax Solutions]
