Are they my Dependent? Qualifying Child
According to the IRS list of Frequently Asked Tax Questions, there is some confusion out there as to exactly when a taxpayer can claim someone as a dependent. So let’s see if we can shed some light on the subject. There are two categories for …
Out with the Old: Records You Can Toss
As many of you have already wrapped-up your tax returns and finding someplace to keep all of the supporting documentation, one of the questions we often here is “How long should I keep this?”. Here’s what you need to keep and what you can throw out without fearing the wrath of the IRS.
Direct Deposit – Wrong Account Number?
If you request your refund by check and someone else deposits it, it is a simple matter to have the IRS reverse the deposit and send you a replacement – but what happens if you put down the incorrect information for a direct deposit?
Mortgage Interest – Deductible?
Mortgage rates are still at some of the lowest rates seen in years, and with some of the current programs like the HARP program, allowing a debt to value ratio of 125%, many people are taking advantage of them.
Unfortunately, not everyone understands what is deductible or non-deductible mortgage interest. And since it all is reported on a single form, the IRS is starting to take a much closer look at this on people’s individual returns.
Why do I have to make estimated payments?
Federal and California State income taxes are pre-paid.
For most people who are paid through payroll, this means that the estimated taxes are withheld from your paycheck throughout the year, and then you file a return to claim a refund or make up the balance due. But if you have multiple sources of income, or receive your income without having any withheld for tax, you may become subject to estimated taxes and underpayment penalties.
Saving for College : 529 plans
As a parent, you may be interested to know how 529 plans help families save for college. A 529 plan is an educational savings option that is operated by a state or educational institution, with tax advantages that make it easier to save for college and other post-secondary training for a designated beneficiary, such as a child or grandchild. These plans are also referred to as qualified tuition programs, tuition plans, or 529 programs.