Tax Information

• e-file Audits
  Do I have a greater chance of getting audited by the IRS if I use IRS e-file?
  
  No. The chance of an audit of an e-filed return is no greater than with a paper return.
  
• e-file Receipt Proof
  How do I know that the IRS really has my return?
  
  The IRS notifies your authorized IRS e-file provider within 48 hours of transmission that your return information was received.
  
• e-file Speed
  Do I really get my refunds faster?
  
  With IRS e-file, you get it back in half the time. It’s even faster and safer if you have your refund deposited directly to your bank account.
  
• Cannot Pay Tax Balance
  What if I owe and cannot pay the full balance due?
  
  The tax preparation software used by your tax professional may allow you to make partial payments. If partial payments are allowed, you can make a payment for less than the balance due amount on your return. If you cannot pay in full by the April tax dead line your tax professional can file an Installment Agreement Request. An approved Installment Agreement allows you to make a predetermined series of partial payments.
  
• e-file Benefits
  What do I gain by using IRS e-file?
  
  Accuracy, security, electronic signatures, proof of acceptance, fast refunds with direct deposit and electronic payment options.
  
• IRS e-file provider
  What is an authorized IRS e-file provider?
  
  An authorized IRS e-file provider is a tax professional accepted into the IRS electronic filing program.
  
• Quarterly Tax Return Due Dates
  When are the quarterly estimated tax returns due?
  
  Your first estimated tax payment is usually due the 15th of April. You may pay the entire year's estimated tax at that time, or you may pay your estimated tax in four payments. The four payments are due April 15th, June 15th, September 15, and January 15th of the following year.
  
  If the due date for making an estimated tax payment falls on a Saturday, Sunday, or legal holiday, the payment will be on time if you make it on the next day that is not a Saturday, Sunday, or legal holiday.
  
• Individual Estimated Tax Payments
  How do I know if I have to file quarterly individual estimated tax payments?
  
  Estimated tax payments can be used to pay Federal income tax, self-employment tax, and household employment tax. To estimate if you need to pay tax on income not subject to withholding or on other income from which not enough tax is withheld, you need to calculate if the total tax you'll owe on your annual income tax return will be covered by the amount of tax you have already had either:
  
  

  • withheld from wages and other payments, or
  • paid in earlier estimated payments for the year, or
  • credited to your account from adjustments or overpayments to previously filed returns.

  Generally, you should make estimated tax payments if you will owe tax more, than an amount specific by law, after withholding and credits, and the total amount of tax withheld and your credits will be less than the smaller of:
  
  

  1. 90% of the tax to be shown on your current tax return, or
  2. 100% of the tax shown on your prior year's tax return, if your prior year's tax return covered all 12 months of the year. However, if your prior year's adjusted gross income exceeded a certain amount based on your filing status, then you must pay 110% instead of 100% of last year's tax. (Note: the percentages change depending on the tax year. Refer to Chapter 2 of Publication 505 , Tax Withholding and Estimated Tax.)

  
  
• Partnership Quarterly Tax
  How do partnerships file and pay quarterly estimated tax payments?
  
  Partnerships file Form 1065 (PDF) , U.S. Partnership Return of Income, to report income and expenses. The partnership passes the information to the individual partners on Schedule K-1, Form 1065. The partners report the information and pay any taxes due on Form 1040. Because partners are not employees of the partnership, no withholding is taken out of their distributions to pay the income and self-employment taxes on their Forms 1040. The partners may need to pay Estimated Tax Payments using Form 1040-ES.
  
• S-Corp Quarterly Tax
  Is an S-Corporation required to pay quarterly estimated tax?
  
  Generally, the corporation must make estimated tax payments for the following taxes if the total of these taxes is more than an amount specified by law:
  
  1. the tax on certain capital gains,
  2. the tax on built-in gains,
  3. the excess net passive income tax, and
  4. the investment credit recapture tax.
  
  For more information regarding estimated tax, refer to Form 1120S Instructions, U.S. Income Tax Return for an S Corporation, under topic Estimated Tax Payments, and Publication 542 , Corporations, under topic Paying and Filing Income Taxes.
  
• Earned Income Credit Eligibility
  Can I get the earned income credit?
  
  You may be able to take this credit if your earned income does not exceed a maximum dollar amount set by law. The maximum dollar amount is based on your filing status and whether you have qualifying children or not. Other rules apply. For details, refer to Tax Topic 601, Earned Income Credit, or Publication 596 , Earned Income Credit.
  
• Child Support Income
  Is child support considered income when calculating the earned income credit?
  
  No, for purposes of calculating the earned income credit, child support is not considered earned income.
  
• Noncustodial Parent Earned Income Credit
  If the noncustodial parent receives permission from the custodial parent to claim a child on his or her tax return, is the noncustodial parent eligible for the earned income credit?
  
  The noncustodial parent cannot claim the earned income credit on the basis of that child because the child did not live with that parent and does not meet the residency test. The custodial parent may be able to claim the earned income credit.
  
• Child Tax and Care Credit
  Can you file for the Child Tax Credit and the Child Care Credit, too?
  
  The Child Tax Credit and the Child and Dependent Care Credit can both be claimed on the same return. They can be claimed on either Form 1040 (PDF) , U.S. Individual Income Tax Return, or Form 1040A (PDF) , U.S. Individual Income Tax Return. Please refer to the Form 1040 Instructions or the Form 1040A Instructions index for the Child Tax Credit. The referenced pages will explain who qualifies for the Child Tax Credit, and how to calculate it. Publication 503 , Child and Dependent Care Expenses, has more information for the Child Care Credit.
  
• Elderly Care
  Can elderly day care payments qualify for the Child and Dependent Care Credit?
  
  Elderly day care payments may qualify as Child and Dependent Care Expenses. In order to be a qualifying person, the person receiving the elderly day care must be either your spouse who was physically or mentally not able to care for himself or your dependent who was physically not able to care for himself and the qualifying person must have the same principal place of abode as you. All of the other criteria for claiming the Child and Dependent Care Credit must also be met.This information can be found in Publication 17 , Chapter 34.
  
• Child Care and Dependent Care
  My spouse and I both work and are eligible for the Child and Dependent Care Credit. May I include my 5 year old son's parochial school kindergarten tuition cost as a qualified expense in Form 2441, Child Care Expenses?
  
  The expenses for kindergarten do not qualify for the dependent care credit because kindergarten is primarily educational in nature. However, you can count the part of the expenses of sending your child to school that is for your child's care if it can be separated from the expenses of education. For example, you may count the cost of an after school care program even though the school tuition does not qualify.
  
• Social Security Survivor Benefits
  Are social security survivor benefits for children considered taxable income?
  
  The person who has the legal right to receive the benefits must determine whether the benefits are taxable. For example, if you and your child receive benefits, but the check for your child is made out in your name, you must use only your part of the benefits to see whether any benefits are taxable to you. One half of the part that belongs to your child must be added to your child's other income to see whether any of those benefits are taxable to the child
  
• Social Security Taxes
  I retired last year, and started receiving social security payments. Do I have to pay taxes on my social security benefits?
  
  To determine whether any of your benefits are taxable, compare the base amount for your filing status with the total of one half of your social security payments plus all your income from other sources, including tax exempt interest. If you are married and file a joint return, you must combine your incomes and your social security and equivalent tier 1 railroad retirement benefits when figuring the taxable portion of the benefits.
  
  The taxable amount of the benefits is figured on a worksheet in the Form 1040 (PDF) or Form 1040A (PDF) instruction book, or in Publication 915 , Social Security and Equivalent Railroad Retirement Benefits. Refer to Tax Topic 423 , Social Security and Equivalent Railroad Retirement Benefits, for base amounts, and additional information regarding taxability and reporting requirements.
  
• Social Security Back Pay Benefits
  I received social security benefits this year that were back pay for prior years. Do I refile my returns for prior years? Are the back benefits paid in this year for past years taxable for this year?
  
  You must include the taxable part of a lump-sum (retroactive) payment of benefits received in the current year in your current year's income, even if the payment includes benefits for an earlier year.
  
  Generally, you use your current year's income to figure the taxable part of the total benefits received in the current year. However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. You can elect this method if it lowers the taxable portion of your benefits. Refer to Publication 915So , Social Security and Equivalent Railroad Retirement Benefits, for a detailed explanation of the election and worksheets.
  
• Second Residence Deductions
  Is the mortgage interest and property tax on a second residence deductible?
  
  The mortgage interest on a second home which you use as a residence for some portion of the taxable year, is generally deductible if the interest satisfies the same requirements for deductibility as interest on a primary residence. Real estate taxes paid on your primary and second residence are, generally, deductible. Deductible real estate taxes include any state, local, or foreign taxes on real property levied for the general public welfare. Deductible real estate taxes do not include taxes charged for local benefits and improvements that increase the value of the property. For more information, refer to Publication 17 , Your Federal Income Tax for Individuals, Chapter 24; Tax Topic 503 , Deductible Taxes; and Publication 530 , Tax Information for First-Time Home Owners.