Each year taxes seem to get more difficult. The Internal Revenue Service (IRS) has very strict income tax guidelines. You may have some questions as to what's income or dependent exemptions. Here are some frequently asked questions about income taxes. Refer to the IRS website for more specific information.
- I receive child support payments from my ex-husband to help support our children. Do I have to report this money as income?
- My wife and I have been separated for the entire year. Our child lived with me most of the year, and my wife paid most of the support. Which one of us can claim our son as a dependent?
- I don't have a social security number for my baby yet. Can I still file a tax return and claim him as a dependent?
- I'm currently paying the IRS monthly for taxes I failed to pay in prior years. Is it still possible for me to receive a tax refund this year?
Q: I receive alimony payments from my ex-husband. Do I have to report this money as income?
- A:Yes, alimony is considered taxable income.
Q: I receive child support payments from my ex-husband to help support our children. Do I have to report this money as income?
- A:No, you don't have to include child support payments as part of your income.
Q: May I have my tax refund given to me by direct deposit in multiple bank accounts?
- A:Yes, you can have your refund deposited in up to three different accounts, dividing it in whatever amount you want. This is called a split refund.
Q: What do I do if I lost my tax refund check?
- A:The IRS has a refund system online where you can request help. Another option is to call the IRS at 800-829-1954.
Q: I received a scholarship for college. Do I have to pay taxes on this amount?
- A:You don't have to pay taxes on a qualified scholarship if it's used for tuition or educational fees, such as supplies, books and required equipment. You must be a candidate at an educational institution for a degree.
Q: Is scholarship money used to pay my room and board at college tax-free?
- A:No, you must report this money as gross income since room and board are incidental expenses.
Q: Am I eligible to claim a dependent exemption for my child?
You can claim him if he's a qualifying child and three tests are met:
- Dependent taxpayer test
- Joint return test
- Citizen or resident test
Q: Who's a qualifying child?
There are multiple requirements that must be met to be a qualifying child:
- Your child must be certain relation to you, including a biological child, a stepchild, a foster child, a sibling or a descendant of one of them
- Your child must be either under 19 years old, under 24 and a full-time student, or permanently and totally disabled at any age
- Your child must have lived with you for more than half the year
- Your child didn't pay for more than half his support for the year
- You child didn't file a joint tax return
Q: What's the dependent taxpayer test?
- A:You can't claim a dependent if you can be claimed as a dependent by someone else. This is true even if your child is a qualifying child.
Q: What's the joint return test?
- A:You can't claim your child as a dependent if he's married and filing a joint return.
Q: What's the citizen or resident test?
- A:The dependent you're claiming must be a US citizen, a US resident alien, a US national, or a Canadian or Mexican resident. There's an exception for certain adopted children.
Q: Can both my husband and I claim our one child on separate tax returns?
- A:No, a dependency exemption can be claimed on only one tax return.
Q: My wife and I have been separated for the entire year. Our child lived with me most of the year, and my wife paid most of the support. Which one of us can claim our son as a dependent?
- A:You're eligible to claim him since you're considered the custodial parent.
Q: Can I file my tax return as "single" if I have been separated from my husband for six months?
- A:No, you have to file as either married filing jointly or married filing separately.
Q: Can I claim my daughter as a dependent even though she was born on New Year's Eve?
- A:Yes, it doesn't matter when she was born during the year.
Q: Can I claim my child at any age or is there an age limit?
- A:There's an age limit in the qualifying child test, which must be passed to claim your child as a dependent.
Q: I don't have a social security number for my baby yet. Can I still file a tax return and claim him as a dependent?
- A:No, you must provide a social security number for the dependent exemption.
Q: Can I claim my 17-year old son even though he files his own tax return?
- A:Yes, although your son won't be able to claim his own personal exemption on his tax return.
Q: I'm currently paying the IRS monthly for taxes I failed to pay in prior years. Is it still possible for me to receive a tax refund this year?
- A:No, since any money from a refund must be used to pay down the money you owe.
Q: Do I have to report the tips I receive at work as income?
- A:Yes, your tips are considered income.
Q: I sometimes receive noncash tips, such as passes and tickets. Do I have to report these as income?
- A:Yes, the value of your noncash tips is considered income.
Q: As an independent contractor, do I have to make quarterly estimated taxes?
- A:Yes, since no taxes will probably be withheld from your income. Use Form 1040-ES, Estimated Tax for Individuals, to help you.