As tax season approaches, it's time to tackle the tax questions, queries and mysteries that stumped you in previous years.
It’s time to file your taxes.
As tax season approaches, it’s time to tackle the tax questions, queries and mysteries that stumped you in previous years. Read on for answers to 15 common tax questions.
Should I hire a tax preparer?
Whether you opt to hire a tax professional will depend on your comfort level with the tax-filing process and the complexity of your tax return. If you’re looking for a tax preparer with a greater level of expertise, consider a certified public accountant or enrolled agent. Both professionals must pass certain exams and gain licensing.
How do I choose the best tax-filing software?
When evaluating the best tax software for your situation, consider the costs and services provided. A good place to start is with the dozen software companies that work with the IRS-partnered Free File Alliance, according to Eva Rosenberg, a Los Angeles-based enrolled agent and founder of TaxMama.com. They’ve been approved by the IRS and meet certain security and privacy requirements.
What is the standard deduction?
The standard deduction is a designated amount of money on which you are not taxed. The amount of the standard deduction you claim depends on your tax status and the year in which you’re filing taxes. For taxes filed in 2019, it is $12,000 for single filers and $24,000 for those married filing jointly.
When will my tax refund arrive?
When your tax refund will arrive depends on when and how you filed your tax return. The IRS reports that 90 percent of federal tax refunds are issued within 21 days, and information is typically available within 24 hours after the IRS receives an e-filed tax return or four weeks after receiving a paper return. Use the IRS Where’s My Refund? tool and the IRS2Go app to track your refund.
Should I file taxes if I’m a college student?
Before you file taxes as a college student, consider your income and whether your parents will claim you as a dependent this year. Students who earn less than $12,000 aren’t required to file a tax return but may still benefit from filing if they had taxes withheld from their paycheck or wish to claim certain tax benefits such as the American opportunity tax credit.
How can I get the biggest tax refund this year?
To get the biggest tax refund this year, start thinking about your tax situation early, ideally before the tax year ends. Next, consider how to maximize deductions through itemizing if you can, claim tax credits and deductions for which you qualify and contribute to your retirement accounts. If your tax situation is complex, consider working with a qualified tax preparer.
What does tax reform mean for my taxes?
Whether you’ll see a larger tax bill or greater refund under the new tax reform law depends on your unique tax situation. For example, certain qualified small-business owners may see a federal tax reduction by as much as 20 percent while others may pay more due to new limits on deducting state and local taxes.
Who qualifies as a dependent on my taxes?
Dependents can include qualifying children, relatives and other individuals whom you support. Dependents must meet certain age, income and housing requirements.
Do I need to report income from my side hustle?
Yes, you may need to report income from a side hustle such as driving for a ride-hailing service or delivering groceries through a task-management platform. In fact, you may owe more than you expect since taxes won’t be automatically withheld like they are in your paycheck. The good news is that many of these digital side gigs will provide you with a 1099 form that logs income. You may also be able to deduct qualified business expenses incurred during your side gig.
How can I file my taxes for free?
You can file your taxes for free if you qualify through the IRS-partnered Free File Alliance, use tax software companies’ own free tax programs or use free fillable online forms, an online version of the paper tax forms. Your state may offer additional free options on your state income tax form for qualified filers.
How can I avoid IRS tax scams?
Avoid common IRS tax scams by treating suspicious or out-of-the-blue communications from purported IRS officials with a healthy skepticism. The IRS will typically reach out by snail mail first, so be wary of emails, texts or phone calls claiming to be from the IRS. Also be on the lookout for bad grammar, threats to call the police and requests for payments via gift card or wire transfer.
Should I select direct deposit?
Yes, if you want to get your refund as quickly as possible, selecting direct deposit should be faster than, for example, requesting a check to be mailed.
How can I make my tax professional’s life easier?
You can make your tax professional’s life easier by being organized, communicating throughout the year, providing necessary paperwork and passing along communications from the IRS promptly. These steps will help your tax preparer score you the largest refund or smallest tax bill.
Can I reduce my chances of an audit?
To reduce your chances of a tax audit, avoid making errors, report all your income, keep proper records and avoid illegal or inappropriate tax moves such as overstating charitable donations.
How can I lower my tax bill?
To reduce your tax bill, take advantage of available tax credits, contribute to your retirement account, consider opening a 529 college savings account, claim eligible dependents and track deductions.
Now you’re ready to file taxes.
For more in-depth answers to each of these tax questions, read more on money.usnews.com. To recap, here are the popular tax questions answered in this slideshow:
— Should I hire a tax preparer?
— How do I choose the best tax-filing software?
— What is the standard deduction?
— When will my tax refund arrive?
— Should I file taxes if I’m a college student?
— How can I get the biggest tax refund this year?
— What does tax reform mean for my taxes?
— Who qualifies as a dependent on my taxes?
— Do I need to report income from my side hustle?
— How can I file my taxes for free?
— How can I avoid IRS tax scams?
— Should I select direct deposit?
— How can I make my tax professional’s life easier?