Ask a CPA

Sorry. Even though you won, your travel expenses are not deductible, nor are they considered gambling losses.

You received a 1099-G form because your state refund is taxable income for the current year. On last year's return, you probably deducted your state and local income taxes as itemized deductions on Schedule A.

Yes, but only if your son or daughter has "earned income" (not investment income) which is reported on their tax return. The contribution is limited to the lesser of $5,500 or net earned income after deducting expenses related to the production of those earnings. A fast food employee, paper route, or other part-time jobs are examples of earned income sources.

There are currently educational credits available for the costs of tuition, fees and books , such as the American Opportunity and Lifetime Learning Credit which can be used to offset the cost of sending your child to college. There are many factors which determine whether any of these credits are available to you. Also, some states have special programs to aid parents with college costs.

There is currently no provision in the code which allows for distributions from any IRA to pay for college education without incurring severe tax ramifications. We recommend that you consider distributions from your IRA to pay for college costs as your last choice. Explore other options first.

Fees are generally based upon the amount of time a CPA spends on your work. Hourly rates can vary from $75 to $300 per hour. However, most small to medium-sized firms provide services on a fixed-fee arrangement, which is discussed and agreed to by the client prior to inception of the work. Preparation of your tax returns is an example of a service provided that would be billed out at a fixed fee. Business services such as bookkeeping, payroll, sales tax and corporate tax return preparation services are often negotiated on a fixed annual retainer, which is billed monthly to the client. This arrangement allows the client to budget for the exact cost of such services in his monthly overhead.

You can verify that your tax accountant is licensed by visiting the website www.ptindirectory.com All tax preparers must now be registered with the IRS and obtain a preparer tax identification number. When you meet with your accountant, you can ask him or her to show you a copy of his PTIN . Many states also require licensing. CPAs, Enrolled Agents, RTRPs ) registered tax return preparers) and Lawyers can all be licensed to prepare tax returns and all must have a PTIN to practice.

No. Every new business should retain a licensed tax professional as soon as possible . A relationship with a trusted advisor such as a CPA , Enrolled Agent or RTRP is a lifelong relationship. A great tax profession is the source of unbiased advice and can provide guidance and peace of mind for the smallest of financial decisions. Not all CPAs or other professionals are willing to accept new business startups so find a tax professional in your community with whom you feel comfortable and who is excited about your new business.

No. If you are married on the last day of the year, you must file either married filing jointly or married filing separately. You are not allowed to file as a single or Head of Household.

Some spouses have had problems with the IRS in the past and still owe the IRS taxes.
When you file a joint return, you and your spouse are both equally responsible for the taxes owed on that return.
Any refund you might have been entitled to could be used to pay your spouse's existing liability with the IRS or the state. Lastly, some people do not want their spouse to be aware of all of their financial involvement.