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steve's Tax Service
federal & STATE tax preparation
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Is There An Age Limit On Claiming My Child As A Dependent?
There is no age limit if the child meets qualifying factors. Per the IRS,
"To meet the qualifying child test, your child must be younger than you and as of the end of the calendar year, either be younger than 19 years old or be a student and younger than 24 years old, or any age if permanently and totally disabled".
There is no age limit on claiming your child as a dependent if the child meets the qualifying relative test.
If I Claim My Child Who Is A Full-Time College Student As A Dependent, Can He/She Claim His/Her Own Personal Exemption When Filing A Return?
If you can claim an exemption for your child as a dependent on your income tax return, she/he cannot claim own personal exemption on his/her income tax return. Your child should check the box on the return indicating that someone else can claim him/her as a dependent.
What Is The Eligibility For The Child Tax Credit?
You can claim an additional $1,000 credit for each dependent child under the age of 17 if you meet income and other factors.
What Are The Tax Implications Of Withdrawing Money Early From A Retirement Account?
Withdrawing money early from a retirement account comes with a 10 percent tax penalty plus regular income tax on the amount withdrawn. Be advised that the additional retirement money could bump you into the next tax bracket, which could affect Social Security taxes and other etc.
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?
No. The IRS will automatically apply any refund due to you against taxes you owe. If your refund exceeds your total balance due on all outstanding liabilities including accruals, you will receive a refund of the amount over and above what you owe.
I Started My Own Business; Can I Deduct My Home Office Expenses?
Yes, expenses for home office should be used exclusively and regularly for the home office, and not a space that is mixed residential and business.
What Should I Do If I Made A Mistake On My Federal Return That I've Already Filed?
Some errors are caught BEFORE the IRS even accepts the taxes and some during the processing of the tax return and corrected by the IRS, so you may not need to correct these mistakes.
However, if you didn't claim the correct filing status or you need to change your income, deductions, or credits, you should file an amended or corrected return using Form 1040X, Amended U.S. Individual Income Tax Return.
How Do I Notify The IRS My Address Has Changed?
What Is The Earned Income Tax Credit And How Do I Claim It?
Some families believe they don't make enough to file their taxes, but taxes must be filed to get this credit, which may help a family with three dependents receive a credit worth up to $5,891.
I Retired Last Year, And Started Receiving Social Security Payments. Do I Have To Pay Taxes On My Social Security Benefits?
Social security benefits include monthly retirement, survivor and disability benefits. They do not include supplemental security income (SSI) payments, which are not taxable. 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.
If you are married and file a joint return, you and your spouse must combine your incomes and social security benefits when figuring the taxable portion of your benefits. Even if your spouse did not receive any benefits, you must add your spouse's income to yours when figuring on a joint return if any of your benefits are taxable.
Do All Businesses File Tax Returns?
All businesses except partnerships must file an annual income tax return. Partnerships file an information return. The form you use depends on how your business is organized.
Can I Apply For An EIN Online?
Yes, if your principle business is located in the U.S or U.S territories.
What is a Tax Credit?
Subtract tax credits from the amount of tax you owe. There are two types of tax credits:
A nonrefundable tax credit means you get a refund only up to the amount you owe.
A refundable tax credit means you get a refund, even if it's more than what you owe.
What Is a Tax Deduction?
Subtract tax deductions from your income before you figure the amount of tax you owe.
Can I Write off Vehicle Expenses On My Taxes If I Use It For Work Purposes?
If you use your car in your job or business and you use it only for that purpose, you may be able to deduct its entire cost of operation. However, if you use the car for both business and personal purposes, you may deduct only the cost of its business use and you must keep records to support your claim.
Your unreimbursed employee expenses are subject to the 2 percent of adjusted gross income floor on Schedule A.
Can I Deduct A Bad Debt?
To deduct a bad debt, you must show that:
There was an intention at the time of the transaction to make a loan and not a gift.
You have no reasonable expectation that the nonbusiness bad debt will be repaid.
Are Business Expenses Deductible?
Generally, 50 percent of meal and entertainment expenses are allowed as a deduction, and you must have records to prove the business purpose.
You may be able to depreciate property you own that is used in a business with a determinable useful life beyond one year, and that is not categorized as excepted property. Depreciation rules differ for cars, residential rental property, office space in your home or farm property.
Can I Deduct Qualified Education Expenses?
You may be able to deduct qualified education expenses for higher education paid during the year for yourself, your spouse or your dependent, UNLESS:
your filing status is married filing separately;
another person can claim an exemption for you as a dependent on his or her tax return;
your modified adjusted gross income (MAGI) is more than $80,000 ($160,000 if filing a joint return);
you were a nonresident alien for any part of the year and did not elect to be treated as a resident alien for tax purposes; or
an education credit is claimed for expenses of the student for whom the qualified education expenses were paid.
The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000.
Can I Deduct Some Of My Contributions To A Traditional IRA?
You may be able to deduct some or all of your contributions to a traditional IRA, or be eligible for a tax credit equal to a percentage of your contribution. To contribute to a traditional IRA, you must be under age 70½ at the end of the tax year and have taxable compensation, such as wages, salaries, commissions, tips, bonuses, or net income from self-employment.
When Will The IRS Begin Accepting 2017 Taxes and When Is The Deadline To Submit?
The IRS announced that the nation’s tax season will begin Monday, Jan. 23, 2017, and reminded taxpayers claiming certain tax credits to expect a longer wait for refunds. WE CANNOT USE YOUR LAST CHECK STUB TO FILE YOUR INCOME TAX, ONLY TO PREPARE YOUR TAXES..
The FILING deadline for personal taxes and to file an extension is April 18.
Are Unemployment Benefits Taxable?
Yes, unemployment income is taxable income
When Is The Personal Income Tax Extension Deadline?
Extension deadlines are up in October, usually the 15 but this year the IRS is extending the deadline to October 17.
If I Have A Business What Can An Extension Do For Me?
When you file an automatic extension of time to file for your corporation on Form 7004, the IRS gives you an extra six months to file a Form 1120 for the business, or an 1120S if a valid S corporation election is in place. Having that additional six months can mean the difference between owing a late-filing penalty or not. If the tax return is filed late and the corporation has an outstanding tax bill, the IRS will increase the amount owed by 5 percent each month until the return is filed or five months pass, whichever is later. However, a late-filing penalty is still charged, even if the corporation doesn't owe any tax. In the case of a C corporation, for example, this will cost the business $100 once the return is more than 60 days late.
When is the Form 7004 Deadline?
In order to get the 6-month extension, Form 7004 must be filed with the IRS by the original tax return deadline for your company. Corporation income tax returns are always due by the 15th day of the third month after the tax year closes. For corporations that maintain their books and records using the calendar year, the deadline is always March 15. When fiscal years are used -- the last day of the corporation's tax year ends on a day other than December 31 -- the deadline is different.
How Do I Know If I have To File Quarterly Individual Estimated Tax Payments?
If you expect to owe at least $1,000 in tax for the current tax year after subtracting your withholding and refundable credits, you may want to make estimated payments.
You expect your withholding and refundable credits to be less than the smaller of:
o 90% of the tax to be shown on your current year’s tax return, or
o 100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)
There are special rules for:
Can I Deduct The Cost Of Searching For A Job? Are Moving Expenses For My New Job Tax-Deductible?
Job search and moving expenses may be tax-deductible depending factors such as distance and etc.
If I Can't Make It In To The Office, Can I Email, Drop Off Or Mail My Documents?
Yes, although we prefer a face to face meeting with our clients, we do understand that coming into the office can be a hassle. Please send your documents and the best contact number, email address and hours to reach.
Can I get Extra Time to File My Taxes?
Filing an extension gives you approximately 6 months to get squared away and to file your personal income taxes. There is only ONE extension per year and it must be filed on or before the April deadline.
You can call us and request an extension on or BEFORE the deadline! It is $25.00 and when you return to file your taxes with us, the $25 is credited to your tax preparation fee.
All we need to file an extension is,
Date of Birth
Social Security Number
If you file jointly with someone, we will need their name, DOB, and social security number as well.
We can take payment and information over the phone so there is no need to come in!
Do I need to renew my I TIN number?
The Internal Revenue Service began mailing letters in August to more than 1 million taxpayers with expiring Individual Taxpayer Identification Numbers and urges recipients to renew them as quickly as possible to avoid tax refund and processing delays.
ITINs with middle digits 70, 71, 72 or 80 are set to expire at the end of 2017. The notice being mailed -- CP-48 Notices, You must renew your Individual Taxpayer Identification Number (ITIN) to file your U.S. tax return -- explains the steps taxpayers need to take to renew the ITIN if it will be included on a U.S. tax return filed in 2018.
The notices will be issued over a five-week period beginning in early August. Taxpayers who receive the notice but have acted to renew their ITIN do not need to take further steps unless another family member is affected.
Who Must Pay Estimated Tax
Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed.
Corporations generally have to make estimated tax payments if they expect to owe tax of $500 or more when their return is filed.
You may have to pay estimated tax for the current year if your tax was more than zero in the prior year. See the worksheet Form 1040-ES, Estimated Tax for Individuals or Form 1120-W, Estimated Tax for Corporations, for more details on who must pay estimated tax.
Can I Get More Information On Estimated Taxes Without Calling The IRS?
Yes, simply follow the link and check out all the information on the IRS website.
What Are The Standard Mileage Rates?
Use the standard mileage rate to figure the deductible costs of operating your car for business purposes. If you do not use the standard mileage rate, you may be able to deduct your actual car expenses.
Beginning Jan. 1, 2017, the standard mileage rates are:
53.5 cents per mile for business miles driven, down from 54 cents for 2016.
17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016.
14 cents per mile driven in service of charitable organizations.
The business mileage rate decreased half a cent per mile and the medical and moving expense rates each dropped 2 cents per mile from 2016. The charitable rate is set by statute and remains unchanged.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.