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Hialeah, Florida 33016
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Below is a compilation of the most important and common questions about taxes and tax regulations:
Q I'm concerned because my check for payment to the IRS has not been cashed yet. What should I do?
A If it had been at least two weeks since the payment was sent to IRS, you should check with your financial institution immediately before you call us.
If the check has still not cleared your account call 800-829-1040 and ask if the payment has been credited to your account.
If the payment has not been credited and your check has not cleared you may choose to place a stop-payment on the original check and send another payment.
Q Should I notify the IRS of my change of address?
A Yes, if you move, you need to notify the IRS of your new address. We can change our records so that any tax refunds due to you or any other IRS communications will reach you in a timely manner.
Submit Form 8822 to request an address change.
Q What should I do if I made a mistake on my federal return that I have already filed?
A It depends on the type of mistake that you made:
Many mathematical errors are caught in the processing of the tax return itself.
If you did not attach a required schedule the service will contact you and ask for the missing information.
If you did not report all your income or did not claim a credit, you are entitled to file an amended or corrected return using Form 1040X (PDF), Amended U.S. Individual Income Tax Return.
When filing an amended or corrected return:
Include copies of any schedules that have been changed or any Form W-2 (PDF) you did not include.
The Form 1040X (PDF) should be submitted after you receive your refund or by the due date of the return, whichever, is earlier.
Generally, to claim a refund, the Form 1040X (PDF) must be received within three years after the date you filed your original return or within two years after the date you paid the tax, whichever is later.
Q How much does a student have to make before he or she has to file an income tax return?
A If you are an unmarried dependent, you must file a tax return if your earned and/or unearned income exceeds certain limits.
To find these limits refer to Filing Requirements for Dependents in Publication 501, Exemptions, Standard Deduction and Filing Information.
Even if you do not have to file, you should file a federal income tax return to get money back if any of the following apply:
You had income tax withheld from your pay.
You qualify for the earned income credit.
You qualify for the additional child tax credit.
Q For head of household filing status, do you have to claim a child as a dependent to qualify?
A In certain circumstances, you do not need to claim the child as a dependent to qualify for head of household filing status, such as when the qualifying child is unmarried and is your child, grandchild, stepchild, or adopted child.
Q Is there an age limit on claiming my children as dependents?
A Age is a factor in the qualifying child test, but a qualifying relative can be any age.
As long as the following dependency exemption tests are met, you may claim him or her:
Qualifying child or qualifying relative test
Dependent taxpayer test
Citizenship or resident test
Joint return test
Q My wife and I are married filing separately. We have one son and we meet all of the dependency exemption tests. We contributed an equal amount to our son's support and want to know if we both can claim him on our separate returns?
A A dependency exemption may only be claimed on one return. Since your son is a qualifying child for both of you, you and your wife can decide who will claim the child.
A multiple support declaration identifying each of the others who agreed not to claim the exemption must be attached to the return of the person claiming the exemption. Form 2120, Multiple Support Declaration, can be used for this purpose. If you cannot agree on who will claim him refer to Tie-Breaker Rule in Publication 501, Exemptions, Standard Deduction, and Filling Information.
Q If you pay child support, are you allowed to deduct anything on your taxes or claim the child as an exemption?
A Nothing can be deducted for the child support payments.
Child support payments are neither deductible by the payer nor taxable income to the payee.
You may be able to claim the child as a dependent.
The parent who the child lived with for the greater part of the year is the custodial parent.
Generally the custodial parent is allowed to claim the exemption for the child if the other exemption tests are met.
The noncustodial parent may be allowed to claim the exemption for the child if the custodial parent signs a Form 8332 (PDF), Release of Claim to Exemption for Child of Divorced of Separated Parents, or a substantially similar statement.
Q If I claim my daughter as a dependent because she is a full-time college student, can she claim herself as a dependent when she files her return?
A If you claim your daughter as a dependent on your income tax return, she cannot claim herself on her income tax return.
If an individual is filing his or her own tax return, and the individual can be claimed as a dependent on someone else's return, the individual cannot claim his or her own personal exemption.
In this case, your daughter should check the box on her return indicating that someone else can claim her as a dependent.
Q How do I know if I have to file quarterly individual estimated tax payments?
A If you owed additional tax for the prior tax year, you may have to make estimated tax payments for the current tax year.
You must make estimated tax payments for the current tax year if both of the following apply:
You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.
You expect your withholding and credits to be less than the smaller of:
90% of the tax to be shown on your current year’s tax return, or
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:
Certain taxpayers with higher adjusted gross income
Farmers and commercial fishermen
Aliens
Estates and Trusts
Q How do I request a copy of my tax return for last year?
A If you need an exact copy of a previously filed and processed return and all attachments (including Form W-2 (PDF)), you must complete Form 4506 (PDF), Request for Copy of Tax Return, and mail it to the IRS.
Use the address provided in the instructions to the form.
Submit a check or money order for $57, per tax year, made payable to the "United States Treasury."
Copies are generally available for returns filed in the current and past 6 years.
In cases where an exact copy of the return is not needed, tax return and transcripts may be ordered.
The tax return transcript shows most line items contained on the return as it was originally filed, including any accompanying forms and schedules.
In most cases, a tax return transcript will meet the requirements for lending institutions for mortgage verification purposes.
The transcript can be ordered by completing a Form 4506-T (PDF) or calling 800-829-1040 and following the prompts in the recorded message.
There is no charge for the transcript and you should receive it in 10 business days from the time we receive your request.
Tax return transcripts are generally available for the current and past three years.
If you need a statement of your tax account which shows changes that you or the IRS made after the original return was filed, you must request a "Tax Account Transcript."
This transcript shows basic data including marital status, type of return filed, adjusted gross income, taxable income, payments and adjustments made on your account.
Tax return and account transcripts are generally available for the current and past 3 years.
Q What types of educational expenses are deductible?
A Deductible educational expenses include:
Amounts spent for tuition, books, supplies, laboratory fees and similar items.
They also include the cost of correspondence courses, as well as formal training and research you do as part of an educational program.
Transportation and travel expenses to attend qualified educational activities may also be deductible.
For more information, refer to Publication 970, Tax Benefits for Education; Chapter 12.
For work related education expenses, refer to Tax Topic 513, Educational Expenses.
Q Am I eligible to claim both my job education expenses (minus 2% of AGI) and the Lifetime Learning Credit on my taxes?
A If you are eligible to deduct educational expenses and are also eligible for the lifetime learning credit, then it is possible to claim both. You cannot use the SAME educational expenses (no “double benefit”) to claim both benefits.
You may choose to allocate some of your expenses to the deduction and others to the credit.
This can be desirable because a qualifying expense for one benefit may not be a qualifying expense for the other tax benefit. For example, the cost of course-related books ordinarily qualifies for the deduction, but not for the lifetime learning credit.
Q How do I claim an educational expense on my return?
A As an employee, you may be able to deduct qualified work related education expenses as an itemized deduction.
These are treated as miscellaneous deductions on Form 1040, Schedule A (PDF), Itemized Deductions and are subject to the 2 percent of AGI floor.
You would complete Form 2106 (PDF), Employee Business Expenses, or Form 2106-EZ (PDF), Unreimbursed Employee Business Expenses, when job-related educational expenses are involved.
Alternatives to educational expense deductions should also be considered, such as the Lifetime Learning and Hope Credits, as discussed in Publication 970, Tax Benefits for Education, Chapters 2 and 3.
Q I donated a used car to a qualified charity. I itemize my deductions, and I would like to take a charitable contribution for the donation. Do I need to attach any special forms to my return? What records do I need to keep?
A You must attach Copy B of Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, to your income tax return in order to take a deduction for the contribution of a qualified vehicle with a value of more than $500.
If you do not attach this form to your return when required, the IRS will disallow your deduction.
If the value of the donation is over $5,000, a written appraisal is required.
If you claim a deduction on your return of over $500 for all contributed property, you must attach a Form 8283 (PDF), Noncash Charitable Contributions, to your return.
If you claim a total deduction of $5,000 or less for all contributed property, you need only complete Section A of Form 8283 (PDF).
If you claim a deduction of more than $5,000 for an item or a group of similar items, you generally need to complete Section B of Form 8283 (PDF) which requires, in most cases, an appraisal by a qualified appraiser.
You will need to obtain and keep evidence of your car donation and be able to substantiate the fair market value of the car.
If you are claiming a deduction of $250 or more for the car donation, you will also need a written acknowledgement prepared by the charity at the time of donation, that includes a description of the car and a statement of whether the charity provided any goods or services in return for the car and, if so, a description and estimate of the fair market value of the goods or services.
Q Can I deduct alimony paid to my former spouse?
A If you are divorced or separated, you may be able to deduct the alimony or separate maintenance payments that you are required to make to your spouse or former spouse, or on behalf of that spouse.
Q Is interest on a home equity line of credit deductible as a second mortgage?
AYou may deduct home equity debt interest, as an itemized deduction, if all the following conditions apply:
You are legally liable to pay the interest
You pay the interest in the tax year
The debt is secured with your home
You do not exceed certain limitations
Q Is the mortgage interest and property tax on a second residence deductible?
A The mortgage interest on a second home which you use as a residence for some portion of the taxable year, is generally deductible if the interest satisfies the same requirements for deductibility as interest on a primary residence.
Real estate taxes paid on your primary and second residence are, generally, deductible.
Deductible real estate taxes include any state, local, or foreign taxes on real property levied for the general public welfare.
Deductible real estate taxes do not include taxes charged for local benefits and improvements that increase the value of the property.
Q I am in a disaster area and heard the IRS could help me. What can the IRS do?
A If you have been affected by a Presidentially declared disaster, the IRS may help you by:
Allowing additional time for filing returns and making payments, and in some circumstances, waiving penalties if the disaster has caused you to file or pay late.
The IRS may also, provide copies or transcripts of previously filed returns, free of charge.
You may be eligible to file for a casualty loss deduction on the prior year's tax return, or if you have already filed, by submitting an amended return (Form 1040X).
Q How do I report this 1099-DIV from my mutual fund?
A Enter the ordinary dividends from Form 1099-DIV (PDF), box 1a, on line 9a of Form 1040 (PDF), U.S. Individual Income Tax Return.
Enter any qualified dividends from Form 1099-DIV, box 1b, on line 9b of Form 1040.
If you have an amount entered in other boxes of your 1099-DIV refer to Form 1040, Schedule D Instructions (PDF) to see where to report them.
If your only capital gains and losses are from capital gain distributions, refer to Form 1040 Instructions (PDF).
Q I received a Form 1099-MISC instead of a Form W-2. I'm not self-employed, I do not have a business. How do I report this income?
A If payment for services you provided is listed in box 7 of Form 1099-MISC (PDF), you are being treated as a self-employed worker, also referred to as an independent contractor:
You do not necessarily have to "have a business," but simply perform services as a non-employee to have your compensation treated this way.
The payer has determined that an employer-employee relationship does not exist in your case.
That determination is complex, but is essentially made by examining the right to control how, when, and where you perform those services.
It is not based on how you are paid, how often you are paid, nor whether you work part-time or full-time.
There are three basic areas that are relevant to determine employment status:
Behavioral control,
Financial control, and
Relationship of the parties
For more information on employer-employee relationships, refer to Chapter 2 of Publication 15, Circular E, Employer's Tax Guide and Chapter 2 of Publication 15-A (PDF), Employer's Supplemental Tax Guide.
If you think that you were, or are, an employee and you would like the IRS to issue a determination, you may submit Form SS-8 (PDF), Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.
Unless you think you were an employee, you report your non-employee compensation on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or Form 1040, Schedule C-EZ (PDF), Net Profit from Business:
You also need to complete Form 1040, Schedule SE (PDF), Self-Employment Tax, and pay self-employment tax on your net earnings from self-employment, if you had net earnings from self-employment of $400 or more.
This is the manner by which self-employed persons pay into the Social Security and Medicare trust funds. Employees pay into the Social Security and Medicare trust funds, as well as income tax withholding, through deductions from their paychecks.
Generally, there is no tax withholding on self-employment income.
You may be subject to the requirement to make quarterly estimated tax payments.
If you did not make estimated tax payments, you may be charged a penalty for underpayment of estimated tax penalty.
Q I am self-employed. How do I report my income and how do I pay Medicare and Social Security taxes?
A You are a sole proprietor if you are the sole owner of a business that is not a corporation:
Report your income and expenses from your sole proprietorship on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship) or on Form 1040, Schedule C-EZ (PDF), Net Profit from Business.
If the total of your net earnings from self-employment from all businesses is $400 or more, you must pay into the Social Security and Medicare systems by filing Form 1040, Schedule SE (PDF), Self-Employment Tax.
Self-Employment tax consists of the Old-Age, Survivors, and Disability Insurance (social security) and the Hospital Insurance (Medicare) taxes.
Q I received a Form 1099-MISC with an amount in box 7, (nonemployee compensation). What forms and schedules should be used to report income earned as an independent contractor?
A Independent contractors report their income on Form 1040, Schedule C (PDF), Profit or Loss from Business (Sole Proprietorship), or you may qualify to use Form 1040, Schedule C-EZ (PDF), Net Profit from Business (Sole Proprietorship):
You should also be aware of Form 1040, Schedule SE (PDF), Self-Employment Tax, which must be filed if net earnings from self-employment are $400 or more. This form is used to figure your social security and Medicare tax which is based on your net self-employment income.
You may need to make estimated tax payments. If not timely paid, you may also need to file Form 2210 (PDF), Underpayment of Estimated Tax by Individuals, Estates & Trusts.
Q What, if any, quarterly forms must I file to report income as an independent contractor?
A Because you generally will have no taxes withheld from your income, you may need to make quarterly estimated tax payments:
For information on how to make estimated tax payments refer to Form 1040-ES (PDF), Estimated Tax for Individuals.