Tax Tips

Dependents:

  • You may be able to claim an individual as a dependent on your return regardless of age or relationship. Many children who are 18 or older may still be claimed as a dependent by their parents. Ask your preparer for guidance on claiming a dependent.
  • If you can be claimed as a dependent on another person’s return you are required to report the PFD income to the IRS even if it was your only income.
  • If you can be claimed as a dependent on another person’s return, inform your preparer if you file a return on your own. On page one of your tax return, the box next to ‘Someone can claim you as a dependent’ must be checked. Omitting this will result in complications in filing your tax return and may result in the IRS asking you to return to them any refund paid in addition to fines and penalties.

Income:

  • The 2018 permanent fund dividend was $1,600. This is taxable income and should be reported on your tax return. Even if your PFD was garnished, you must report it as income.
  • Most of the income you receive has already been reported to the IRS by the payer. The IRS knows what you have made. File a properly completed tax return to minimize your tax burden.

Filing:

  • You may be required to file a return due to the requirements of the Affordable Care Act. If you can be excluded from the requirements due to an exemption you must file a return to claim the exemption. For more information regarding the Affordable Care Act check out the IRS website Affordable Care Act Tax Provisions for Individuals and Families.
  • If you are not married you cannot file Married Filing Jointly.
  • Even if the tax deadline has passed, it’s not too late to file. If you are due a refund you may be able to collect the amount due for three years after the due date of the return.

IRS Debt:

  • If you receive a notice from the IRS you must respond. Call the number on the notice, typically found in the upper right hand corner. Responding in a timely manner will prevent further IRS action and.or debt. Ignoring IRS letters may result in a levy on your income and/or lien on your assets. Click the Tax Clinic tab to see how ABDC can assist you.
  • If you owe, you can’t avoid owing by not filing. File before the due date to avoid the failure to file penalty. Consider a short term extension of time to pay or an installment agreement. See FAQ for more information on payment options or go to irs.gov/payments.
  • An extension of time to file is not an extension of time to pay.

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