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FAQ's
1. How much does an unmarried dependent student
have to make before he or she has to file an income tax return?
If you are an unmarried dependent, you must a tax
return if your earned and/or unearned income exceeds certain limits.
You must file a return if any of the following apply.
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Your unearned income was more than $950
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Your earned income was more than $5,700.
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:
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You had income tax withheld from your pay
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You qualify for the earned income credit
2. How much of my unemployment compensation is taxable
this year?
You do not have to pay tax on unemployment
compensation of up to $2,400 per recipient. Amounts of over $2,400
are still taxable. Wisconsin does not follow the federal exclusion
for the first $2, 400 of unemployment exclusion.
3. Can a person receive a tax refund if they are
currently in a payment plan for prior year’s federal taxes?
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 your refund in you owe
certain past-due amounts, such as federal tax, state tax, a student
loan, or child support.
IRS will automatically apply the refund to the
taxes owed.
4. If you pay child support, are you allowed to deduct
anything on your taxes or claim the child as an exemption?
Nothing can be deducted for the child support
payment. Child support payments are neither deductible by the payer
nor taxable income to the payee.
You may be able to claim the child as a dependent.
The parent whom the child lived with for the greater part of the
year is the custodial parent.
Generally the custodial parent is allowed to claim the exemption for
the child if the other exemption tests are met.
The noncustodial parent may be allowed to claim the exemption for
the child if the custodial parent signed a Form 8332,
Release/Revocation of Release of Claim to Exemption for Child by
custodial Parent of Divorced or Separated Parents, or a
substantially similar statement.
5. I am divorced with one dependent child. This year my
ex-spouse will claim the child as an exemption. Does this mean I cannot qualify
as a head of household?
You can file as head of household even though you
do not claim your unmarried dependent child as an exemption if you
meet all of the following requirements:
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You are unmarried or considered unmarried on the last day of the
year.
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You paid more than half the cost of keeping up a home for the year.
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A qualifying person must live with you in the home for more than
half the year (except for temporary absences such as school).
6. Is the loss on the sale of your home deductible?
The loss on the sale of a personal residence is a
nondeductible personal loss.
7. Must a partnership or corporation file a tax form even
it though it had no income for the year?
A domestic partnership must file an income tax
form unless it neither received gross income nor pays or incurs any
amount treated as a deduction or credit for federal tax purposed.
A domestic corporation must file an income tax form whether in has
taxable income or not.
8. Does a small company need a tax ID number?
A sole proprietor who does not have any employees
and who does not file any excise in pension plan tax returns does
not need an employer identification number. In this instance, the
sole proprietor used his or her social security number as the
taxpayer identification number.
If you are the sole owner of an unincorporated LLC (Limited
Liability Corporation) that has employees you now need to get a
separate EIN to file employment taxes for tax years starting on or
after January 1, 2009.
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