For eleven months out the year, the last thing on your mind is doing your taxes. But once April hits, suddenly you have a list of tax questions that you need answered right away. Here are some of the most common tax questions our tax preparers get before and during tax season.
1. What tax documents do I need for my appointment?
Everyone’s situation is different, but the most common document you need to bring to your appointment is your W-2 wage statement from each employer. If you are self-employed, you will most likely receive a 1099-NEC instead (or several if you have multiple clients). The next most common document is the 1099-INT that reports any interest you may have accrued on bank accounts. Even if the amount seems small, you should bring this document with you. Next you need to report any income earned on investments—you will receive a 1099-B and/or 1099-DIV form from your investment firm. If you are self-employed, make sure to also bring an organized list of expenses.
Go to Most Common Tax Documents for more detailed list.
2. Why do I owe more than last year if my income hasn’t changed much?
Tax preparers get this question a lot because most people expect to owe around the same amount year after year and often feel like not much has changed. But most people do get yearly raises, or take on a side hustle, and even a small raise could bump you into another tax bracket. If you have any sort of major life change, such as a job change, marriage, birth of a child, or a divorce, it could also affect your filing status and your tax rate. And things like standard deductions, tax rates, and available credits also change from year to year. You may need to adjust your W-4 tax withholding form with your employer to have more taken out during the year, so you’re not surprised at the end of the year.
Read more at How Major Life Changes Affect Your Taxes.
3. How do I update my W-4 tax withholding form?
If you had a job change, got married, got divorced, or had a child in the past year, you should update your W-4 tax withholding form with your current employer. This form let’s your payroll department know how much tax they should withhold from every paycheck, and if it’s not filled out correctly, you may be under or overpaying. Check with your HR or payroll department about how to update the W-4 form—you often have to complete it online through your company’s HR portal. A tax preparer can help you estimate how much to withhold.
Get more specific information at How to Fill Out Your W-4 Tax Withholding Form.
4. What deductions can I take for working from home?
The honest answer is…you can’t take any deductions for working from home if your income is reported on a W-2 by your employer. It doesn’t matter if you paid for your entire home office—the IRS doesn’t allow you to deduct work-related expenses from income reported on a W-2. Some states still allow it as long as those expense are more than 2% of your adjusted gross income. If you receive income reported on a 1099-NEC, then you can take certain self-employed expenses as deductions.
For more information, go to: Which Work from Home Deductions Can I Take?
5. I’m freelance, so why are you telling me I can’t deduct business expenses?
While you may consider yourself a freelance worker because you worked for multiple companies or you do not receive benefits from your employer, if your employer(s) reported your income on a W-2, you cannot deduct any work-related or business expenses. In the eyes of the IRS, you are only considered self-employed if your income is reported on a 1099-NEC, 1099-K, or is self-reported.
For an easy guide on deductions, go to: Tax Deduction Quick Guide.
6. Which personal deductions can I take?
If you own a home, you can deduct the mortgage interest you paid throughout the year to your mortgage company. They will report the total on a 1098 that you can usually download from your account during tax season. In addition, you can deduct the property taxes you paid on your home. Other common personal deductions are state and local taxes (these have a $10,000 cap), medical expenses that are more than 7.5% of your income, and charitable donations.
More information at the Tax Deduction Quick Guide.
7. Can I claim my college student and/or adult child as a dependent?
The short answer is…most likely. If they are a full-time college student or they live with you and you provide over half of their living expenses, you can most likely claim them as a dependent.
Read more specifics at Is My Adult Child a Dependent?
8. How can you work your magic and lower my taxes for me?
This is another question tax preparers often get, but the truth is that there are no magic or special workarounds to a tax return. A good tax preparer will talk to you about your specific situation, ask the right questions, and find the best deductions and/or credits that legally apply to your tax return.
9. Where’s my tax refund?
You filed your taxes on time, but April 15th has come and gone, and you haven’t received your refund. Why is that? While Uncle Sam wants his payment on time and will automatically withdraw the amount you owe (if you owe) on April 15th, he is not as concerned with a deadline for your refund. Refunds typically arrive a couple of weeks after you file, but the length of time can depend on when you filed and if you asked for a check or direct deposit—a check can take longer.
Tax Questions That Begin With. . .
While this list of tax questions could be endless, the above are some of the most common. Tax preparers also get a lot of questions that begin with:
- Can you tell the IRS. . .?
While it may seem counterintuitive, tax preparers do not have a special line of communication with the IRS or a unique phone number. Unless you are dealing with something like an audit, you often have to contact the IRS yourself if you have a question or an issue that goes beyond your tax return.
- But my friend/mom/colleague said. . .
We all have that core group of people that we turn to for advice about life’s various issues, and that sometimes includes taxes. But keep in mind that the person you’re talking to has a different tax situation than you do and probably doesn’t have a full understanding of tax law.
But the tax preparers at Moore & Paquette Tax Group do understand tax law and are happy to help with any additional questions. Just give us a call at 818-845-1964.
**Please note that the tax law changes often and the above information is not legal advice. You should always consult a tax preparer before completing a tax return.