Tax Filing Tips

The most frequently asked tax questions related to Tax Filing Tips
Can't find the answer to your question? Ask a tax question.

View All Tax Questions

Five Last Minute Refund Tips

Don't Overlook the value of the IRA deduction

Asked Tuesday, April 10, 2012 by an anonymous user
An IRA deduction can save you from $650 to $2,574 depending on your filing status and tax bracket on your federal tax return.
If you are under 50 you can put up to $5,500, Over 50 you can put up to $6,500.
Tax Question Answered By CPAdirectory
Answer Provided by: CPAdirectory

Five Last Minute Refund Tips

If you are self-employed, take advantage of an SEP plan

Asked Tuesday, April 10, 2012 by an anonymous user
Employers can contribute up to a quarter of the salaries that each employee earns (25%)up to an annual maximum limit. For 2017, that maximum will be $54,000, up $1,000 from its 2016 level. That's the first rise in the SEP IRA limit since 2015,
For self-employed. the 25% refers to the self-employed worker's "net earnings" from the business. The net result of the math is that the 25% limitation on "net earnings" works out to 20% of your adjusted profit after the self-employment tax adjustment in a Simplified Employee's Pension Plan. Self- employed individuals can even take the deduction on their 2016 tax return and fund the pension plan as late as six months from April 18, 2016 if they file for an extension to file their return.
Tax Question Answered By CPAdirectory
Answer Provided by: CPAdirectory

Five Last Minute Refund Tips

Take the American Opportunity Credit if you have children in undergraduate college.

Asked Tuesday, April 10, 2012 by an anonymous user
The American Opportunity Credit can save taxpayers as much as $2,500 per student with $1,000 of the credit being a refundable credit above and beyond the money paid.
Tax Question Answered By CPAdirectory
Answer Provided by: CPAdirectory

Five Last Minute Refund Tips

Check to see if you have worthless stock or loans that are completely uncollectible

Asked Tuesday, April 10, 2012 by an anonymous user
You can deduct the loss on a worthless security without selling it but only if the stock or loan is completely worthless. If it is truly worthless, you can treat the item on your return as if it were a short term capital asset you sold for $0 on the last day of the tax year. In fact you can take a write-off over and above your gains to the extent of $3,000 this year.
Tax Question Answered By CPAdirectory
Answer Provided by: CPAdirectory

Five Last Minute Refund Tips

If you itemize, don't forget the non-cash contribution deductions.

Asked Tuesday, April 10, 2012 by an anonymous user
Be sure to itemize any donations of clothing and household items that you made to charities throughout the year, as non- cash donations over $500 require you to file form 8283 with your return. Non-cash donations up to $500 do not need special documentation with the filing of your return.
Tax Question Answered By CPAdirectory
Answer Provided by: CPAdirectory

Tip Income Reporting

Tip Income - Employee Penalty for not reporting

Asked Thursday, March 01, 2012 by an anonymous user
If you do not report tips to your employer as required, you may be subject to a penalty equal to 50% of the social security and Medicare taxes or railroad retirement tax you owe on the unreported tips.
The penalty amount is in addition to the taxes you owe.
You can avoid this penalty if you can show reasonable cause for not reporting the tips to your employer.
To do so, attach a statement to your return explaining why you did not report them.
Tax Question Answered By CPAdirectory
Answer Provided by: CPAdirectory

Tip Income Reporting

Tips of less than $20 a month

Asked Thursday, March 01, 2012 by an anonymous user
If you're total tips for any 1 month from any one job are less than $20, do not report the tips for that month to that employer.
Tips of less than $20 are not reportable to the employer and not subject to FICA tax But are subject to income tax.
Tax Question Answered By CPAdirectory
Answer Provided by: CPAdirectory

Tip Income Reporting

Form 4070 - Employee Tip reporting to the Employer

Asked Thursday, March 01, 2012 by an anonymous user
If your employer does not give you any other way to report your tips, you can use Form 4070, Employee's Report of Tips to Employer. Fill in the information asked for on the form, sign and date the form, and give it to your employer.
Give your report for each month to your employer by the 10th of the next month. If the 10th falls on a Saturday, Sunday, or legal holiday, give your employer the report by the next day that is not a Saturday, Sunday, or legal holiday.
Tax Question Answered By CPAdirectory
Answer Provided by: CPAdirectory

Tip Income Reporting

Form 4137 - Employee Unreported Tip reporting to IRS

Asked Thursday, March 01, 2012 by an anonymous user
If you received $20 or more in cash and charge tips in a month from any one job and did not report all of those tips to your employer, you must report the social security and Medicare taxes on the unreported tips as additional tax on your return.
To report these taxes, use Form 4137, Social Security and Medicare Tax on Unreported Tip Income, to figure these taxes.
The unreported tips must be included as Wages on Form 1040, Line 7.
Tax Question Answered By CPAdirectory
Answer Provided by: CPAdirectory