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Common Questions About Taxes (Part 1)

Posted in Taxes
March 3rd 2015 by
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Still figuring out your 2014 tax return? Here are answers to common questions the IRS gets.

Who Can I Claim as a Dependent?

You can claim a child as long as:

  • He or she is related to you biologically, through adoption or through marriage
  • The child lived with you for at least half the year
  • You financially supported the child and are the only person claiming him or her as a dependent

You can claim an adult if:

  • He or she lived with you the entire year
  • He or she made less than $3,950
  • You financially supported this person and are the only one claiming him or her as a dependent

Am I Eligible for Dependent Care Deductions?

You can receive a tax credit for qualified expenses on child or dependent care. The following qualifications must be met to receive the credit:

  • You (and your spouse, if filing jointly) must have earned income
  • You are the primary caretaker
  • The care expenses were needed for you to work or search for a job
  • The child is under 13 or the dependent is disabled
  • The dependent can not have been in the care of your spouse, dependent or the dependent’s parent

Can I Get Tax Deductions for My Job?

Yes, you can deduct work-related expenses that are not reimbursed by your employer. The total expenses must have been more than 2% of your adjusted gross income. You can deduct things like licensing fees, professional memberships, home offices and moving expenses.

Note these items may have stipulations which you’ll want to review before claiming them.

How Can I Find the Value of Charitable Contributions?

If you donated something other than cash, you can still count it on your tax return. TurboTax has a tool called “It’s Deductible” which will estimate the fair market value of what you donated.

What Education Credits Can I Claim?

The two main credits are the American Opportunity Credit and the Lifetime Learning Credit.

The American Opportunity Credit is up to $2500, or up to $1000 as a refund if the credit exceeds the amount you owe in taxes.  This credit is available when students are pursuing a degree at an eligible school and are enrolled in classes at least half time for one academic period. This credit is only available the first four years of study.  Single filers must earn less than $80,000 (modified adjusted gross income) and joint filers less than $160,000.

The Lifetime Learning Credit is up to $2000 for qualified students who attended at least one course at an eligible school. Single filers must have made less than $52,000 and joint filers less than $104,000.

Stay Tuned!

Our next post will continue with more questions about taxes.

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