TaxSlayer Blog is your source for tax preparation news, tips and advice.
Don’t take filing status for granted. It could be an important factor in getting that maximum refund. If you are new to tax preparation and filing status is confusing you- here are a few tidbits to get you started. 1. Even if they are not working, have never worked and have no intention of working, your spouse is not considered your dependent. If you are married, you have the option of filing Married Filing Joint or Married Filing Separate. In some cases, other filing statuses may apply to you even if you are married but not living with your spouse. 2. If you are married, 9 times out of 10, you should file Married Filing Jointly because you are eligible for benefits not due to other filing statuses, such as a higher standard deduction. However, everyone’s tax situation is different and you should choose the legal filing status that is most advantageous to you. 3. Head of household means “single with qualified dependents.” You could even use this filing status if you are married but “considered unmarried” according to IRS guidelines. 4. If your spouse dies before you file your current year’s tax return and you have not remarried you can file as Married Filing Joint. If you have a qualified dependent and you have not remarried, you may file as a Qualifying Widower for the next two years after your spouses death. This is important because Qualifying Widower provides a higher standard deduction than Head of Household. 5. Sometimes deciding if you have to file as Single versus other filing statuses can be tricky especially if you have qualified dependents or if you are separated from your spouse. Luckily for you, TaxSlayer has an easy to use filing status wizard to help you with choosing the correct filing status and ensure you keep that maximum refund.
Kids are afraid of the monster under the bed; adults are afraid of IRS audits. Although the IRS is going to do a certain number of them a year, and there is no fool-proof way to guarantee you will never be a target, there are some simple ways to be careful during tax preparation and make yourself a little less interesting to them. 1. Check your numbers. Nothing is quite as enticing to the Internal Revenue Service as shoddy math and round numbers. If they think you may not actually know what goes on your tax return, it will be very tempting for them to come and take a look. And the IRS is not required to resist temptation. 2. Inconsistent reporting. If the numbers you are reporting on your tax return don’t match what is on your W2 tax form, then that sets off a red flag. Be careful when copying over amounts during tax preparation. 3. Small businesses reporting a loss. In fact, Schedule C is interesting for the simple reason that some people report income and losses incorrectly because there are no W-2 tax forms. Of course, there are plenty of legitimate losses in the business world. Just remember to keep records. 4. Meals and entertainment deductions. It is way too easy to abuse this one, and the IRS knows it. If you are going to use these deductions, again, keep good records and have legitimate reasons for these write-offs. 5. Home-office deductions. This is a special area of interest when it comes to Home-office deductions. To ensure you are correct, make sure that your home office and equipment are not used for anything other than legitimate business needs.
One of the extremely cool things about choosing to e-file with TaxSlayer is that they help you find hidden tax deductions. Unfortunately, sometimes those deductions change, and not always for the better, so it’s good to be aware of what’s different when you e-file your tax return. Let’s look at one of the really cool tax deductions that the IRS has for teachers named the Educator Expense Deduction. If you are like many educators, you may be spending several hundred dollars per year out of your own pocket to improve conditions in your classroom and give your kids life-enriching experiences. Here is how you can use this tax deduction when you e-file with TaxSlayer this year, according to IRS Publication 17. The IRS allows eligible educators to deduct $250 of qualified education expenses as an adjustment to income. Anything considered “ordinary and necessary” that was over the $250 could be deducted on your tax return as a miscellaneous itemized deduction. Eligible educators work with kindergarten students through grade 12 as teachers, instructors, counselors, principals or aides. They work at least 900 hours per school year in a school that state law decrees is a provider of elementary or secondary education. You may claim the deductions on your tax return using Form 1040 (line 23) or 1040A (line 16).
A common reason customers seek tax help from TaxSlayer is confusion over using their PIN, an identification number that acts as your online signature when you efile your state and federal taxes. The PIN is used on the signature page of the income tax return during the efiling process. The page has two parts, with slightly different rules. The first has to do with your Current Year PIN, a five-digit number you make up during the final stages of tax prep. The second part of the TaxSlayer signature page has to do with your Prior Year information, which is your information from last year. You will need last year’s Adjusted Gross Income (AGI) from your federal taxes OR last year’s PIN number. If you have last year’s AGI, you can go ahead and use it. We recommend actually having a copy of your prior year tax return handy so that you can pull the numbers you need for this year’s return during tax prep. Here is where you find your AGI from last year: Form 1040 EZ – line 4. Form 1040 – line 37. Form 1040 A – line 21. Your Prior Year PIN is the PIN you used while filing last year’s income tax return. If you don’t remember it, you will need to go to the IRS website and request an Alternate PIN, which takes about a minute. Put the Alternate PIN in the spot that says Prior Year PIN. Do not forget to check the box underneath that says you are using an Alternate PIN. Make sure the numbers are correct and in the right places and you should get through using your PIN without needing tax help when you efile.