Tax Tip #1
E-file to get your refund faster. It is always quicker to get your refund when you E-file rather than mailing in paper forms. Keep in mind that the IRS is delaying most refunds until at least February 15 this year.
Tax Tip #2
Ask tax preparers about the Earned Income Tax Credit (EITC). Be sure to claim this if you are eligible, as some people get over $6,000 back. Don’t forget to ask about the California EITC, which is new (as of last year) and many tax preparers are still learning about.
Tax Tip #3
Undocumented persons and DACA youth will not be fined for a lack of health insurance (the IRS calls this the Shared Responsibility Payment). There is misinformation going around about this matter, so please spread the word!
Tax Tip #4
You can only claim dependents who are citizens of the U.S., Canada or Mexico. Keep in mind residency for tax purposes differs from immigration definitions. If you were living in any of these three countries for tax purposes, then you would count as a resident.
Tax Tip #5
Include any educational expenses you paid to improve job skills. The federal government recognizes the above, so ask your tax preparer.
Tax Tip #6
All income needs to be reported when you file your taxes (cash income is reported as self-employment income.) Cash income is reported as self-employment income on either a Schedule C or Schedule CEZ and the tax rate is 15.3 percent, plus your tax rate. You can deduct expenses only if they were required and ordinary to do the specific type of work you were performing.
Tax Tip #7
You can file as Married Filing Jointly even if your spouse lives in another country. You may need to prepare an Individual Taxpayer Identification Number (ITIN) application for the spouse, which can take several months, so plan accordingly.
Tax Tip #8
The tax deadline of April 15, 2017 will be the last day to file and claim a refund for tax year 2013. You have three years to file from the filing deadline to claim a refund.
Tax Tip #9
Summer day camps, babysitting or daycare count as dependent-care credit (if the child is under age 13 and this allowed you to work or look for work). While the above does not include private school, pre-school or kindergarten, it does include after- and before-school care.
Tax Tip #10
You can file as Head of Household instead of Married Filing Jointly only if you do not live together and have a dependent. The dependent must have been living with you or be a parent for whom you were providing more than half of their living expenses.
Tax Tip #11
You must be LEGALLY married to file as Married Filing Jointly. If you are not legally married, you still may be able to claim your partner on your taxes if they lived in your home for the entire tax year, had income less than $4,000 and meet other tests to be claimed as your dependent.
Tax Tip #12
Savings bonds and direct deposit are two great ways to get your refund (faster and more secure than a check mailed to your home). One of the advantages of obtaining savings bonds is that the interest rate is higher than most other savings products currently available. You need to keep the money in that account for at least a year, so if you need the money early, only do a portion of your refund.