I'm currently working on a new free e-book that will consist of questions and answers about the IRS. I'm trying to cover as many subjects as I can, but I need your help. E-mail me your tax questions. All of you who send me your tax questions will get a free copy of the e-book when it's finished. Below is a sample of the first chapter about filing your taxes with the IRS.
Chapter 1 Filing & Paying Your Taxes
Is there any way to stop the IRS from taking my tax return refund?
If you have an IRS debt, then there isn't any way to stop them from applying your refund to your debt. Remember, until that debt is paid, everything you have, the IRS can take to apply to your debt.
Can you get a rapid refund if you owe the IRS?
No, if you owe the IRS, then any refund you're entitled to goes to your debt. What's even worse about the rapid refund is that a rapid refund is a loan from the tax prep company that gave it to you. So if you tried to get a rapid refund while you owe the IRS, not only will you still owe the IRS, but now you have to also pay back the rapid refund loan.
I hadn't filed my taxes for 5 years and just now got them all filed and sent to the IRS. If any of the years give me a refund, do I get it?
Yes... but only if you would have gotten the refund for either last year or the year before. Any tax refund prior to two years ago is null and void.
I keep hearing about this tax rebate check that is supposed to stimulate the economy. What's that all about?
The government has passed an economic stimulus package to give Americans an amount of money based on their income to help "jump start" the economy. The average middle class person should receive $600.00, or $1200.00 for a married couple, plus $300.00 for each child that is a dependent.
What is the income tax cap? Does it affect me?
The income tax cap is the maximum amount of income that can be taxed. Any income over that amount is not taxed by the Federal Government. The current tax cap is around $92,000, although some politicians are trying to raise the cap or get rid of it all together. Unless you make over $100,000 per year, the cap really doesn't have an effect on you.
Can I go to prison if I don't pay my taxes?
No, you won't go to jail for not paying your taxes. Now if you don't file your taxes, that's a federal offense, and you can go to jail for that, although it's not very common unless the debt is really big. However, the IRS can make your life a living hell if you don't pay your tax debt.
Credits and Deductions:
Is there any way I can get extra money from the IRS?
If you mean deductions and credits, then sure you can get a higher tax refund if you qualify for either. If you're asking about the IRS just giving away free money, then no, there isn't any way they'll do that.
Can I write off the tuition to my child's private school on my taxes?
No, the IRS does not consider private school tuition to be a necessary expense. It falls into the IRS's luxury category, making it impossible to claim.
If two people claim the same child as a tax credit, for example the child's grandparent and parent, who gets the child tax credit?
Child tax credit goes in the order of the child's relationship to whomever is claiming them. So with the above example, the parent would have the first crack at the credit over the grandparent. Now if the grandparent can prove that they have taken care of the child for the tax year in question, then they would be eligible for the credit; but the burden of proof rests on them.
Labels: Tax Filing, Tax News