Tax Related Questions

 
  • Lifetime Learning Credit
    The Lifetime Learning Credit is one of two tax credits, along with the American Opportunity Credit, that help offset the costs of higher education. Y...
  • Tuition and Fees Deduction
    The tuition and fees deduction allows you to deduct up to $4,000 of qualified educational expenses from your adjusted gross income. Qualifying expens...
  • Qualified Education Expenses
    The various education credits available to students and those who pay for them are based on the money spent on qualified education expenses, but the d...
  • Ordinary Dividends
    Dividends are what the shareholders of a company get, as their share of the company’s profits. If you own stocks, mutual funds, or bonds, you receive ...
  • Qualified Dividends
    Dividends are divided into two broad categories: ordinary dividends and qualified dividends. Ordinary dividends are taxed at the same rate as ordinary...
  • Self-Employment Profit or Loss
    Subtract your self-employment expenses from your self-employment income. If the difference is positive, meaning your self-employment income was greate...
  • Taxable Interest Income
    Generally speaking, you have to pay taxes on any interest income you receive, including interest on bank accounts, deposited insurance dividends, and ...
  • Tax-Exempt Interest Income
    Tax-exempt interest is interest that is not subject to federal income tax. Income earned from bonds issued by states, cities, counties or the District...
  • Tip Income
    All tips are taxable and must be reported to the IRS, including cash tips you get directly from customers, tips from customers using credit cards, and...
  • Allocated Tips
    The basic idea behind allocated tips is that if you work in a restaurant, cocktail lounge, or similar establishment, you deserve 8% of the business’s ...
  • Additional Child Tax Credit - Form 8812
    If the amount of your Child Tax Credit exceeds the amount of income tax you owe, you may be able to claim the Additional Child Tax Credit and get a re...
  • Telephone Excise Tax Refund
    The Telephone Excise Tax Refund (TETR) was implemented to return excise taxes collected on long-distance phone service between February 28, 2003 and A...
  • Educator Expenses Deduction
    Eligible educators can deduct up to $250 of expenses for books, supplies, computer equipment, and other classroom materials incurred over the course o...
  • State and Local Sales Tax Deduction
    Those who itemize deductions on Schedule A have the option of claiming either state and local income taxes or state and local sales taxes. They canno...
  • What Are Charitable Contributions?
    Charitable contributions, in cash or in property donated to qualified organizations, are tax deductible only if you itemize your deductions on Schedu...
  • Home Mortgage Interest Deduction
    The Home Mortgage Interest deduction allows you to deduct the interest paid in a given year on a loan taken to secure your primary residence, where yo...
  • First-Time Homebuyer Credit
    The first-time homebuyer tax credit is a special tax break available to qualified taxpayers who purchased a primary residence between April 9, 2008 an...
  • What Are Casualty Loss Deductions?
    A casualty loss against your home, household items, or vehicle, resulting from property damage or destruction by a sudden, unexpected, or unusual even...
  • Child Tax Credit
    The Child Tax Credit allows you to reduce your income tax burden by up to $1,000 per qualifying child, depending on your income. A qualifying child m...
  • American Opportunity Tax Credit
    The American Opportunity Tax Credit helps students and parents pay for college expenses. In 2009 the American Recovery and Reinvestment Act, also kno...
  • Roth IRA
    A Roth IRA is an individual retirement account (IRA) that is generally subject to the same rules that govern traditional IRAs, with a few notable exce...
  • Qualified Charitable Distribution
    Qualified charitable distributions allow IRA owners over the age of 70.5 to directly transfer up to $100,000 tax free from their IRA (excluding SEPs a...
  • Archer Medical Savings Account (MSA)
    Archer MSAs are tax-exempt trusts or custodial accounts set up with a U.S. financial institution that allow taxpayers who are self-employed and employ...
  • Health Savings Accounts (HSAs)
    A health savings account (HSA) is a tax-exempt trust or custodial account created to pay or reimburse qualified medical expenses. In general, any adul...
  • Making Work Pay Tax Credit
    A component of the Stimulus, the Making Work Pay Credit was available for the 2009 and 2010 tax years. The refundable tax credit gave back to working ...
  • Capital Gains and Losses - Schedule D
    Attach Schedule D to your 1040 to report your capital gains and losses. Starting in 2011 there is a new form that also deals with capital gains and l...
  • Self-Employment Tax
    Schedule SE calculates the tax due on your self-employment earnings. Generally speaking, you must pay self-employment tax if you earned $400 or more i...
  • Miscellaneous Income - Form 1099-MISC
    Form 1099-MISC reports various types of miscellaneous income other than wages, salaries, and tips, which are reported on a W-2 instead. Payments for ...
  • Foreign Tax Credit - Form 1116
    Individuals, estates, and trusts can file Form 1116 to claim the Foreign Tax Credit if they paid or accrued certain taxes to a foreign country or U.S....
  • Employee Business Expenses - Form 2106
    Form 2106 is for employees to deduct ordinary and necessary expenses for their jobs. An ordinary expense is one that is common and accepted in your ...
  • Moving Expenses - Form 3903
    You can use Form 3903 to deduct your moving expenses. Your move must occur within 1 year of the start of work at the new location. Note, you do not n...
  • Casualties and Thefts - Form 4684
    Form 4684 reports casualties and thefts of both personal use property and income-producing business property. Destruction of property by fire, storm, ...
  • Mortgage Interest Credit - Form 8396
    Form 8396 is used to calculate the mortgage interest credit for a given tax year as well as any carryforward to a future year. The mortgage interest ...
  • Low-Income Housing Credit - Form 8586
    Form 8586 allows owners of qualified residential buildings in low-income housing projects to claim the low-income housing credit, which is taken over ...
  • Qualified Adoption Expenses - Form 8839
    Form 8839 is used to claim the adoption credit and an exclusion of any employer-provided adoption benefits. Both credit and exclusion apply to the exp...
  • Wage and Tax Statement - Form W-2
    Employers must file Form W-2 for every employee they paid more than $600 in wages, tips, and other compensation, and from whom they withheld income, s...
  • Certain Gambling Winnings - Form W-2G
    Form W-2G is the tax form for gambling winnings and the federal income tax withheld on these winnings. You must provide a Form W-2G if You receive m...
  • Hope Credit
    The Hope Credit is a tax credit available to help students, or their parents and spouses, pay for tuition and related expenses for the first two years...
  • Standard Mileage Rates
    The standard mileage rates are optional set rates that employees, self-employed individuals, and other taxpayers can use to compute the tax deductible...
  • Gambling Losses Deduction
    You can deduct gambling losses as a miscellaneous itemized deduction on your Schedule A, but only up to the amount you report in gambling winnings on ...
  • Miscellaneous Deductions
    Many itemized deductions are grouped under the umbrella term “miscellaneous deductions” and, like other itemized deductions, can be claimed on your Sc...
  • Health Coverage Tax Credit - Form 8885
    The Health Coverage Tax Credit is available for individuals who qualify and their families to help with their health insurance costs. The HCTC pay...
  • What is the Adjusted Gross Income (AGI)
    Adjusted gross income (AGI) is a special calculation of income that determines your eligibility for certain credits and deductions. Most phase out or ...
  • What is Basis?
    The basis of a piece of property is usually the cost at which you bought it. This can include the amount you paid in cash, debt obligations, other pro...
  • Capital Gains or Capital Losses
    Capital gains occur when a capital asset, such as a home, household furnishings, real estate, stocks, or bonds, is sold. The difference between the am...
  • What Is a Deduction?
    A tax deduction is a special tax break that reduces the amount of income on which you are taxed, thus reducing your overall tax burden. Deductions ar...
  • What Is Earned Income?
    Earned income is income that you had to work to earn, either working for someone else who pays you or working in a business you own and run. Use your ...
  • What Is Unearned Income?
    Unearned income is income that you did not work to earn. Unearned income is often important in figuring out if a dependent needs to file a tax return....
  • What Is the Standard Deduction?
    The standard deduction is a set amount, adjusted yearly for inflation, that can be subtracted from your gross income, thus reducing the total income u...
  • What Is Modified Adjusted Gross Income?
    Also known by its acronym MAGI, the modified adjusted gross income is figured by adding back to your Adjusted Gross Income (AGI) specific benefits, ex...
  • Earned Income Credit
    The Earned Income Tax Credit is a refundable credit that helps low- and moderate-income workers keep more of what they earn. When the amount of the cr...
  • What Is a Tax Credit?
    A tax credit is a special tax break put in place by Congress and the President that reduces the total amount of tax you owe the government. In certai...
  • Who must file taxes?
    If your gross income was as least as great as the amount shown below and you are under 65 years old, you must file an income tax return Single - $9,5...
  • What Is a Tax Extension?
    You must submit Form 4868 to file for a tax extension. This will give you an additional six months to file your tax return, making your new tax deadli...
  • Above-the-Line Deductions
    Above-the-line deductions are deductions that you subtract directly from your gross income and are separate from normal itemized deductions, which you...
  • Nontaxable Combat Pay Election
    Members of the military can elect to have their nontaxable combat pay included as part of their overall income towards the earned income tax credit (E...
  • How long until I receive my tax refund?
    A refund typically takes less than 21 days to reach e-filers who choose direct deposit. E-filers who request a paper check instead may have to wait up...
  • What are the types of filing statuses?
    There are five possible filing statuses, based on your marital status and family circumstances, which determine the amount of your standard deduction,...
  • Single Filing Status
    Single is the default filing status for taxpayers who are unmarried or considered unmarried. Your marital status on the last day of the calendar year...
  • Married Filing Jointly Filing Status
    Married filing jointly is one of two filing statuses available to married taxpayers, the other being married filing separately. Married filing jointly...
  • What is my tax liability?
    Your tax liability is the amount of money you owe the government. Taxpayers meet (or pay) their federal tax liability through withholding, estimate...
  • Married Filing Separately Filing Status
    Married filing separately is one of two filing statuses available to married taxpayers, the other being married filing jointly. Married filing separat...
  • What Is the failure to File penalty?
    The failure-to-file penalty results when you do not file your tax return by the deadline. The penalty usually amounts to 5% of your unpaid tax liabil...
  • Head of Household Filing Status
    Head of household is a special filing status that allows for several unique tax breaks such as a higher standard deduction, lower tax rates, and more ...
  • What is the failure to pay penalty?
    As its name suggests, the failure-to-pay penalty results when you fail to pay your taxes by the April tax return deadline. The penalty amounts to 0.5...
  • What is my principal residence?
    Your principal residence, also known as your main home, is the home you live in most of the time. It can be a house, houseboat, mobile home, cooperati...
  • What is the interest on unpaid tax
    When you fail to file your tax return on time or pay your tax due, not only will you face failure-to-file and failure-to-pay penalties, but interest c...
  • What is withholding?
    Withholding is the money that employers take out of their employees’ paychecks for federal income tax, social security and Medicare taxes, and state a...
  • What are personal exemptions?
    A personal exemption is a tax deduction that allows you to reduce your taxable income, thus reducing the amount of income tax you owe. The amount of...
  • What tax breaks can a dependent get me?
    For every dependent you have, you are allowed to claim a dependency exemption, which decreases the amount of income on which you are taxed. For 2011 t...
  • How do I update my withholding?
    You can change your withholding at work by submitting a new Form W-4 [Employee’s Withholding Allowance Certificate]. It’s a good idea to submit a new ...
  • What Is a Dependency Exemption?
    In addition to the Personal Exemptions for you and your spouse, the IRS allows you to substract an equivalent exemption amount from your taxable incom...
  • Who qualifies as a dependent?
    Dependents are divided into two categories: qualifying children and qualifying relatives, each with its own set of requirements. If your dependent is ...
  • Can an adult qualify as a dependent?
    You may be able to claim certain adults who are permanently and totally disabled, regardless of age, as a qualifying child. You may also be able to...