FAQs: Individuals

Individual returns are due on April 15^th (assuming the 15th isn’t on a holiday or weekend) after the close of each calendar year but can be filed up to two months later for individuals who are out of the US on the initial due date. Individual returns can also be extended and filed no later than October 15th (assuming the 15th isn’t on a holiday or weekend).

S Corporation and partnership returns are due on March 15th (assuming the 15th isn’t on a holiday or weekend) after the close of the calendar year but can be extended and filed no later than September 15^th (assuming the 15th isn’t on a holiday or weekend).

An extension of time to file is not an extension of time to pay. All taxes must be paid in full by their original due dates to avoid penalties and interest. Individuals who qualify for the combat zone extension can file and pay at a later date if they meet certain requirements. See the tab addressing this in FAQs.

Yes. Contact us to proceed.

Possibly. The Treasury Department requires that if the combined value of your foreign financial accounts (or those for which you have signatory authority) at any time during the previous year exceeds $10,000, you must file a FinCEN Report 114 online by April 15^th of the subsequent year. The filing of Form FinCEN Report 114 is automatically extended to October 15^th. Foreign accounts include foreign bank accounts, foreign trusts, overseas investment accounts, and foreign retirement accounts if there is a guaranteed payment from the account and if the investor exercises any level of control over the investment, or any financial account for which the taxpayer has signatory authority. Certain taxpayers may also be required to file form 8938 with their tax return. Penalties for not filing these forms can range from $10,000 up to half of the balance of the account. Willfully withholding this information can be cause for criminal charges. Clients who are not sure if they have a filing requirement in this regard should contact us to verify.

You are required to file if you are 1) a citizen or resident of the U.S., 2) a domestic partnership, 3) a domestic corporation, or 4) a domestic estate or trust.

You will generally file a part year resident return in each state. The income reported to each state will be the income you earned while a resident of each state.

Generally speaking you should claim 1 for yourself, 1 for your spouse and 1 for each of your dependents. There are many limitations and other issues which can affect this general rule so please contact us if you would like more comprehensive tax planning.

As an independent contractor (IC), your earnings are from self-employment and are generally subject to Social Security and Medicare taxes at 15.3% in the US regardless of where the income is earned. This is in addition to income tax. The combination of these two taxes can be shocking. There are ways to mitigate the self-employment taxes. Please contact us if you would like to learn more.

With the passing of 2018 tax reform unreimbursed employee expenses are no longer deductible. This includes unreimbursed business travel, uniforms, dues and subscriptions, and job search expenses.

As an independent contractor (1099), expenses incurred in order to earn the income are generally deductible as long as they are “ordinary and necessary”. This basically describes expenses which are normally incurred in the same line of work and which are not unnecessarily expensive.

There are two types of dependents; qualifying children and qualifying relatives. In all cases, the potential dependent must be a US citizen, a resident alien, or a resident of Canada or Mexico, AND be unmarried.

To be a qualifying child, a person must:

Be either your child, step child, eligible foster child, brother, sister, step sibling, or descendant of any of them AND be younger than you AND either under age 19 at the end of the tax year OR a full time student under age 24 at the end of the tax year

OR permanently disabled AND

Live with you more than half of the year AND

Not provide more than half of his or her own support AND

Not be a qualifying child of any other taxpayer

Child Tax Credit payments are available if you have a qualifying child and meet certain other requirements.

A qualifying child is an individual who:

• Is under age 17 at the end of 2023
• Is your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of them (for example, a grandchild, niece, or nephew).
• Does not provide more than one-half of his or her own support during 2023.
• Lives with you for more than one-half of tax year 2023.
• Is a U.S. citizen, U.S. national, or U.S. resident alien and has an SSN valid for employment in the US.

OTHER DEPENDENT CREDIT

If your dependent(s) does not qualify for the Child Tax Credit, they may qualify for the Other Dependent Credit.  You are eligible for this credit if you can claim the person as a dependent and the dependent meets certain conditions:

• Turned 17 before before Jan 1, 2024
• Is a US citizen, national or resident alien and have an individual taxpayer number
• Dependent parents or other qualifying relatives that you support
• Dependent who lives with you but isn’t related to you
• You cannot use the dependent to claim the Child Tax Credit/Additional Child Tax Credit
• The maximum credit per dependent is $500.

CHILD AND DEPENDENT CARE CREDIT

The child and dependent care credit is a tax credit that may help you pay for care for a qualifying person so that you can work, look for work or attend school.  A qualifying person is a dependent under the age of 13, or a dependent of any age or spouse who is incapable of self-care and who lives with you for more than half of the year.  The amount of credit you can claim depends on your income and the actual expenses paid in 2023 for your dependent’s care.  For 2023, the maximum credit you can receive is $3,000 for one qualifying person and $6,000 for 2 or more qualifying persons.

For an extensive list of FAQs including who qualifies and special circumstances, please visit the IRS website – Child and Dependent Care Credit FAQs | Internal Revenue Service (irs.gov).

In most cases married taxpayers are better off filing jointly with their spouses. Generally, you want to figure your taxes jointly, then separately and compare the outcome. Other considerations like a pending divorce or legal concerns should also be considered.

There are a number of different ways to settle an outstanding balance with the IRS beyond sending a check with a payment voucher. If you are unable to pay your tax balance due in its entirety when the return is filed, an installment agreement can be requested from the IRS. All payment options can be found at the following IRS webpage: http://www.irs.gov/Payments

Audits are fairly rare. However, planning to successfully defend against an audit should always take place when the return is prepared. To this end, good practices include the following:

Original copies of all tax documents going back 3 years.

Always save receipts to prove any deductions claimed.

Before contacting the IRS, contact us as soon as possible.

Generally, we request the following info:

• W-2s / 1099s / 1098s / 1095s / prior year federal and state tax returns (new clients only). Always keep your original documents.
• U. S. state of residence during tax year and current U.S. address
• Phone number
• Date of birth (for every person on the return including dependents)
• Any other tax related info you have: marital status, dependent(s) (SS#’s, full names, dates of birth), house expenses (property taxes, interest, indicate if you recently purchased), interest/dividend/rental income, capital gains from investments, charitable contributions (list the amounts, the organization they were contributed to, and state whether cash or property) car registration fees, etc.

If you are unable to find the tax documents needed to prepare your returns, you have two options: call each of the institutions/employers/brokers/etc. and ask them to resend the documents or obtain a record from the IRS. In order to obtain a record from the IRS, either order them online at www.irs.gov or call (800) 829-1040 and request an “account transcript” for the tax year in question. They will either fax it or mail it to the address you have on file with the IRS. If you have the fax number of the CPA at Hughes Szuberla you are working with, you can have the IRS fax the transcript directly to that individual.

You should receive an email confirmation from us by the close of the next business day stating that we received your tax information. This email will usually include a link you will use to pay our fee. We will begin preparing your return after we receive confirmation that the fee is paid. Once we prepare the return, we will email you with any outstanding questions. Once those questions are resolved, we will e-file your returns upon receipt of your signed 8879 (e-file authorization). The form 8879 has to be signed by the Taxpayer and Spouse (if applicable) before we can file the tax return.

Yes. Contact us to determine what entity makes the most sense for your situation.

We send all our previous clients a link to a secure portal where they can upload their documents safely. If you are a new client or do not have the email with the link please email info@HSTaxCPAs.com.