Author: Doug Hansen

Epay Your Estimated Tax Payments

Just had a client ask me today if he could shedule his estimated tax payments to come directly out his checking account on a quarterly basis.                     

There are two ways to have this automatic withdrawal to occur.  If you efile your return through a tax preparer, you can have your preparer designate how much to withdraw on each of the dates 4/15, 6/15, 9/15 & 1/15.  You can also notify the IRS within 2 days of the payment date that you don’t want to make the payment if circumstances change.  The other method is to register with EFTPS and you can designate up to a year in advance what dates and what payments you would like to have taken out of your account.  For those of you who have a tough time remembering to make your estimated tax payments on time, this is a great way to take the worry out it.  You just need to make sure you have money in the account on the appointed days

Six Important Facts about Dependents and Exemptions

Some tax rules affect every person who may have to file a federal income tax return – these rules include dependents and exemptions. Here are six important facts the IRS wants you to know about dependents and exemptions that will help you file your 2010 tax return.

1.  Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,650 on your 2010 tax return.

2.  Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse. If you’re filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.

3.  Exemptions for dependents. You generally can take an exemption for each of your dependents. A dependent is your qualifying child or qualifying relative. You must list the social security number of any dependent for whom you claim an exemption.

4.  If someone else claims you as a dependent, you may still be required to file your own tax return. Whether you must file a return depends on several factors including the amount of your unearned, earned or gross income, your marital status, any special taxes you owe and any advance Earned Income Tax Credit payments you received.

5.  If you are a dependent, you may not claim an exemption. If someone else – such as your parent – claims you as a dependent, you may not claim your personal exemption on your own tax return.

6.  Some people cannot be claimed as your dependent. Generally, you may not claim a married person as a dependent if they file a joint return with their spouse. Also, to claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year. There is an exception to this rule for certain adopted children. See IRS Publication 501, Exemptions, Standard Deduction, and Filing Information for additional tests to determine who can be claimed as a dependent.

If you need further clarification on who can be claimed as a dependent on your tax return, contact us!