The 6 Most Asked Tax Questions

1. What documents do I need to give my CPA to do my taxes?

The most common tax forms are: a W-2 from your employer and a 1099-INT for interest received. Mortgage interest statements and charitable contribution receipts are also very common to have. When in doubt save it and ask.

2. I didn’t earn much last year – do I still need to file taxes?

In a nutshell, yes. Americans should file an income tax return even if their total income is below filing requirements. Complete the necessary forms because money can and is left on the table by those who think they don’t need to file. An example of this: reimbursable education credits.

3. Dependents, who can I claim?

Your children may qualify but our society is finding more and more families with elderly parents or relatives now living with them. Significant others or friends overstaying their welcome on your sofa may be claimed, if they meet certain qualifications.

4. We have children now, what deductions or credits are available?

• Child and dependent care tax credits
• Earned income tax credits
• Child tax credits

These credits are dependent on income, expenses and on qualifying children.

5. Our oldest is heading off to college, are there any tax benefits available for them?

Education tax credits and deductions are available; these may include: tuition and fees, and books and supplies. Education tax benefits and deductions are available under the following tax provisions:

• The American Opportunity Tax Credit
• Lifetime Learning Credit
• Tuition and fees deduction

6. What paperwork do we need to keep and for how long?

Federal income tax returns are here to stay. Copies of your tax returns and all backup documentation must be kept for three years. For additional information see

http://taxadvantageous.com/Resources/Record-Retention.html

If you don’t want a pile of papers one solution is to scan and save your documents as PDFs to a USB drive. Keep that drive with your other important papers (marriage certificates, birth and death certificates, my business card…) in a fire proof safe or a safety deposit box.

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