Frequently Asked Questions

IMPORTANT NOTE: The information found on this website is general in nature and may not apply to the reader's situation. Therefore, the reader should not rely on the information on this website alone. For specific advise, please call us at Kenneth M. Perkins, CPA, PC. Thank you.

Question:   Is there an age limit on claiming my children as dependents?
Answer:   Age is a factor in the qualifying child test, but a qualifying relative can be any age.

As long as the following dependency exemption tests are met, you may claim him or her:

1.  Qualifying child or qualifying relative test

2.  Dependent taxpayer test

3.  Citizenship or resident test

4.  Joint return test
Question:   How much does an unmarried dependent student have to make before he or she has to file an income tax return?
Answer:   If you are an unmarried dependent, you must file a tax return if your earned and/or unearned income exceeds certain limits.
  • To find these limits refer to Filing Requirements for Dependents in Publication 501, Exemptions, Standard Deduction and Filing Information.
  • Even if you do not have to file, you should file a federal income tax return to get money back if any of the following apply:

1.  You had income tax withheld from your pay.

2.  You qualify for the earned income credit.

3.  You qualify for the additional child tax credit.

Question:   If I claim my daughter as a dependent because she is a full-time college student, can she claim herself as a dependent when she files her return?

Answer:   If you claim your daughter as a dependent on your income tax return, she cannot claim herself on her income tax return.

  • If an individual is filing his or her own tax return, and the individual can be claimed as a dependent on someone else's return, the individual cannot claim his or her own personal exemption.
  • In this case, your daughter should check the box on her return indicating that someone else can claim her as a dependent.
Question:   Can I receive a tax refund if I am currently in a payment plan for prior year's federal taxes?

Answer:   As a condition of your agreement, any refund due you in a future year will be applied against the amount you owe.

  • Continue making your installment agreement payments as scheduled because your refund is not considered as a substitute for your regular payment due.
  • You may not get all of your refund if you owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support. You can contact Financial Management Service (FMS) toll-free at 800-304-3107.
  • The IRS will automatically apply the refund to the taxes owed.
Question:   For head of household filing status, do you have to claim a child as a dependent to qualify?
Answer:   In certain circumstances, you do not need to claim the child as a dependent to qualify for head of household filing status, such as when the qualifying child is unmarried and is your child, grandchild, stepchild, or adopted child.
Question:   What is the American Recovery and Reinvestment Act (ARRA) of 2009?
Answer:   The American Recovery and Reinvestment Act (ARRA) of 2009 was signed into law by President Obama on February 17, 2009. The bill is intended to provide a stimulus to the U.S. economy in the wake of the economic downturn. The bill includes federal tax cuts, expansion of unemployment benefits and other social provisions, including domestic spending in education, health care, and infrastructure, including the energy sector.
Question:   What should I do if I made a mistake on my federal return that I have already filed?
Answer:   It depends on the type of mistake that you made:
  • Many mathematical errors are caught in the processing of the tax return itself.
  • If you did not attach a required schedule, the IRS will contact you and ask for the missing information.
  • If you did not report all your income or did not claim a credit, you should file an amended or corrected return using Form 1040X (PDF), Amended U.S. Individual Income Tax Return.

When filing an amended or corrected return:

  • Include copies of any schedules that have been changed or any Form W-2 (PDF) you did not include.
  • Generally, to claim a refund, the Form 1040X (PDF) must be received within three years after the date you filed your original return or within two years after the date you paid the tax, whichever is later.
  • Please allow the IRS 8-12 weeks to process an amended return.
Question:   What is a split refund?
Answer:   A split refund lets you divide your refund, in any proportion you want, and direct deposit the funds in up to three different accounts with U.S. financial institutions.
Question:   How do I know if I have to file quarterly individual estimated tax payments?

Answer:   You must make estimated tax payments for the current tax year if both of the following apply:

  • You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.
  • You expect your withholding and credits to be less than the smaller of:
    • 90% of the tax to be shown on your current year’s tax return, or
    • 100% of the tax shown on your prior year’s tax return.  (Your prior year tax return must cover all 12 months.)

There are special rules for:

  • Certain small business taxpayers for periods beginning 2009
  • Certain taxpayers with higher adjusted gross income
  • Farmers and commercial fishermen
  • Aliens
  • Estates and Trusts
 

Member:
VA Society of CPAs, American Institute of CPAs, NATP, NSA