Tax Tips
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 depending on how much income the child has. Ask your preparer for guidance on claiming a dependent. If you can be claimed as a dependent on another person’s return, inform your preparer if you file a return on your own. Omitting this will result in complications in filing the tax return and may result in the IRS asking you to return to them any refund paid in addition to fines and penalties. Dependents with social security income (a SSA-1099) will need to have a tax return filed on their behalf. A dependent can only be claimed by one taxpayer, on one tax return!
The 2022 Permanent Fund Dividend (PFD) was $3,284. The PFD is taxable income and must be reported on your tax return. Even if your PFD was garnished, you must report it. Most of the income you receive has already been reported to the IRS by the payer. The IRS knows what you have made, including most self employment income. File a properly completed tax return to minimize your tax burden. All income received is taxable unless specifically excluded by the IRS Tax Code. You have to report all income, even if you did not receive a tax form.
The IRS tax filing deadline in 2022 was April 15th. This is also when tax payments are due, regardless of extensions. If you filed an extension, the filing deadline in 2022 was October 15th. An extension of time to file is not an extension of time to pay. 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.
If you are not legally married, you cannot file Married Filing Jointly. If you are Married Filing Separate, you must have your spouse’s name, date of birth, and social security number to electronically file your return. Without these, the return must be paper filed. If you had health insurance through the Marketplace, you are required to file a return due to the regulations of the Affordable Care Act. You will need a Form 1095-A to file your tax return. For more information regarding the Affordable Care Act, visit the IRS website Affordable Care Act Tax Provisions for Individuals and Families. If your spouse owes a debt and your share of a refund has been or will be garnished, you can file the injured spouse allocation which allows you to obtain your share of the refund. This allows the injured spouse to file a joint return and benefit from credits not available to Married Filing Separate returns, including Earned Income Credit and Additional Child Tax Credit.
Not all letters from the IRS are bad! If you need assistance understanding a letter you’ve received, please contact ABDC. 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 may reduce further IRS action and/or debt. Ignoring IRS letters may result in a levy on your income and/or lien on your assets. ABDC may be able to assist you. If you owe, you cannot 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 FAQs for more information on payment options or go to irs.gov/payments. If you received an Identity Verification letter from the IRS, it must be handled directly by the taxpayer. The IRS will not send you your refund until it has been resolved. Follow the instructions on the letter to complete.
The Child Tax Credit is a partially refundable credit for individuals with a qualifying child and earned income. In 2022, the CTC will go back to the normal qualifications and rules. The IRS rules for qualification are complex, contact ABDC if you have questions.
The IRS estimates that for e-filed returns, refunds sent via direct deposit will arrive in less than three weeks, and refunds sent by paper check are usually mailed out by the IRS within four weeks. There are various reasons the IRS may delay a refund being sent, or that you may not have received it yet. If it has been over the estimated timeframe, you can visit the IRS website Where’s My Refund to check the status.
Your employer is required to withhold federal taxes from your paycheck including social security, Medicare and federal income taxes. The amount of federal withholdings is determined by an employee’s W-4 and is based on filing status, income, extra withholdings, etc. Your federal withholdings and credits determine if you receive a refund or have an amount due.