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FAQs

Filing Taxes

The tax payment is a process that all taxpayers must follow each year. Any person who generates an income in the U.S. must file a statement of taxes. These taxes are a portion of your income withheld by the government to comply with different purposes for the benefit of the people living in the country.

All inquiries, estimates, tax return reviews from previous years, and ITIN applications for you and your family are free. Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

Why does an undocumented immigrant need to pay taxes?

Everyone who works in the U.S. by law needs to report wages to the IRS. If you file your taxes, you may qualify for a refund based on your legal deductions. If you have family you are supporting in Mexico or Canada, you can also claim them as dependents and increase your refund amount. In the event of an immigration reform or amnesty, the tax return will be your best document to prove length of time in the U.S.

Where does the tax money go?

Federal Taxes are used for National Defense, social programs and payment of external debt.

State taxes are used for Public Education, Schools, Public roads and Recreational areas.

What to take to my tax preparation appointment?

Zigma Tax Service suggests the following:

Bring all the personal information for you and your dependents: income (W-2 and/or 1099 forms, unemployment income, etc.), social security cards, identification, and dates of birth.
Don’t forget to include your expenses such as medical expenses, mortgage interests, donations, uniforms, miles, etc.
Don’t forget to ask your tax preparer if you are eligible for some stimulus money or tax credits. If you are self-employed, take a summary of all the expenses that will be included your tax preparation.
Ask about all the options you have to receive your tax refund faster.
Ask about our promotions and discounts.
It is important that you tell your tax preparer if you have had problems with the IRS in recent years.
Always provide your correct mailing address and phone numbers where the IRS can contact you, such as a work phone, home phone, and cell phone.
It is important that both spouses are present if filing their taxes together.

Visit our office and, after a short questionnaire, we will exactly tell you the documents you need.

Can I file taxes even if I was paid in cash?

Yes, even if you were paid in cash, you can file your taxes. We recommend keeping a record of all payments received during the year. Also, keep track of expenses related to your work, for example, costs of purchased tools, if you work in construction.

Do I have to report all my tips on my taxes?

Yes. All tips are taxable income and you must include them on your tax return.

Are gifts in cash subject to taxes?

Generally, the person who receives the gift is not responsible for paying the taxes on the gift. If the gift produces interest, dividends, or rent payments, the recipient would be responsible for paying the taxes on this income.

Do I have to pay taxes on public assistance and/or food stamps?

No, this aid is not subject to taxes. Taxpayers who receive this support will not have to worry about reporting this income.

How can I file taxes if I do not have a Social Security Number?

For these cases, the IRS created the ITIN or Tax ID. ITIN means Individual Taxpayer Identification Number and it is a nine digit number beginning with a “9” assigned by the IRS to people who are required to pay taxes to the United States but do not qualify for a SSN. If you are working in the United States and if you are not eligible for a Social Security Number you will need to apply for an ITIN to file your taxes.

When should I receive my W-2?

Your employer is supposed to provide the Form W-2 by January 31, after the end of the calendar year. The employer must submit and report your wages and withholding on Form W-2 at the end of the year.

Visit our office and we’ll help you get your W-2. Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

Can I file a tax return without a W-2?

If you do not receive a Form W-2, try to contact your employer. If for some reason you cannot retrieve this form, we can help file your tax return with the last pay-stub.

What should I do if I lost my W-2?

In case you lost your W-2 form, you must immediately inform your employer, and go to our office, where our expert and professional staff will help you obtain a copy of your W-2 form to file your tax return.

Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

What is a 1099 Tax Form?

A 1099 is a tax form similar to a W-2 form except that there are usually no taxes withheld; although, in some cases, State taxes have been withheld. It is important that you include your 1099s with your W-2s when filing your taxes.

Visit our office and, after a short questionnaire, we will exactly tell you the documents you need.

What should I do if I lose my Form 1099?

You must immediately communicate with the person who gave it to you. In this case your employer.

Visit our office and, after a short questionnaire, we will exactly tell you the documents you need.

Can I file taxes if I don’t have a Form W-2 or 1099?

Yes, people that are paid in cash can file their taxes. A recommendation if you are paid in cash is to save at least 10% of your income to pay the taxes at the end of the year. It is very important that you keep the records of your income and expenses that you have related to the job; this way, you will be filing your tax return correctly and deducting the expenses that apply to you.

Can a person receive both a W-2 ad a 1099 MISC?

Yes. This means that the person probably worked as an employee and received his/her payment by check, as well as a W-2. Also, he/she probably worked in a place that paid cash, for which he/she will receive a 1099 MISC. This person should present both forms at the time of tax filing.

What happens if I fail to file my taxes by April 15?

You should request an extension from the IRS before the deadline (April 15). If you do not, you will face penalty fines for not filing your taxes on time and will still owe the taxes due.

We can help you with that. Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

What is the deadline for filing taxes?

The deadline is on April 15, 2014 for filing your federal income tax. Although, if it is the first time you file taxes, you may not be subject to this date. To review your particular case, contact Zigma Tax Service and we will help you.

Remember, all consultations, estimates, reviews of your tax returns from previous years and ITIN applications for you and your family members are free. Click here to make an appointment or call 757-454-6120.

What happens if I do not file taxes?

Many people believe that if they only earn little income or cash they are exempt from filing a tax return. However, filing taxes could give you the opportunity to receive a refund. Not filing your taxes can have some serious consequences. The person would probably be obliged to pay the correct amount of taxes owed, as well as a fine.
In addition, not filing taxes may even adversely affect your future immigration proceedings.

What happens if I do not file my taxes?

You will probably receive a letter from the IRS reminding you to file your taxes, especially if your employer has given your W-2 and 1099 forms to the IRS. If you are due a refund, you will lose it if you do not file your taxes within the next 3 years. If you are an independent contractor or self-employed, you may lose the retirement benefits from Social Security, and you’ll get a penalty.

What will happen to my refund if I don’t file my taxes before April 15?

There is no penalty for failure to file if you are going to receive a refund. But if you wait to file a tax return or claim a refund, you are in risk of losing your refund completely. In most cases, to get a refund, the original tax return claiming a refund must be filed within a period of 3 years from the due date of the return.

Is it possible to file a tax return early in the year to receive a refund?

No, the individual income tax returns are based on a calendar year and cannot be filed and processed before January 1 of the following year.

Is my information protected with the IRS? Will they contact the Immigration Service?

According to federal law, your information is protected. The IRS will not contact the Immigration Service unless the individual is under criminal investigation.

I received an email from the IRS saying I should confirm my personal information. Is it a scam?

The IRS never initiates communication with taxpayers through email or asks for taxpayers personal information through this method. With “Phishing” scams, criminals try to steal your money and identity by sending a message asking for your personal information. Scams can also be made by telephone, fax, web sites and social networking sites. If you receive a fraudulent email that claims to be from the IRS, forward this message to the IRS at the following address: [email protected]

Is it necessary for the taxpayer to communicate any change of address to the IRS?

Yes. It is very important to inform the IRS immediately of any change of address. The IRS communicates with taxpayers through letters by mail. It is essential that the taxpayer sends form 822, Change of Address to the IRS to let them know that he/she changed addresses.

We can help your with that. Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

What can I do if I forgot to file some extra income?

If the taxpayer forgot to include some extra income on his/her tax return, he/she must correct it by submitting an amendment to his/her tax return. It is very important that the taxpayer declares all the income generated during the tax year.

We can help you with the amendment. Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

What if more than three years are gone?

After the three-year period expires, the statute that governs reimbursements prevents the issue of a refund check or receiving any credit, including overpayments of estimated taxes or withholding taxes, to other years you paid less than you should. However, the statute of limitations for the IRS to impose and charge all outstanding balances does not begin until the return is filed. In other words, there is no limitation period for the imposition and collection of taxes if you have not filed.

What is an extension?

An extension postpones the deadline to file your return until October 15. However, an extension of time to file does not give more time to pay. If you owe taxes, you need to pay them when requesting an extension, or face a fine for non-payment.

We can help you apply for an extension. Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

What if I cannot pay on time?

If you file on time or request an extension but you do not pay for all or part of the owed balance before the deadline, you will incur interest on the unpaid amount and a fine for not paying. If you cannot pay for the full amount, you should pay as much as you can by the deadline to minimize interest and penalties.

What number should I enter on my Form W-4?

The Form W-4 asks for the number of allowances, which is a type of deduction that can be interpreted as the number of dependents you will support with your salary. The taxpayer must enter the real number of people who depend on your income. If the number is high, no taxes will be withheld and at the end of the year, if the taxpayer does not have that number of dependents, taxes will be owed.

We can help you with that. Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

What should I do if I do not receive my W-2 form in time to process my tax return?

If you do not receive the missing or corrected form by February 14 from your employer/payer, you may call the IRS at 800-829-1040 for assistance. If you do not receive the missing form in sufficient time to file your tax return timely, you may use the Form 4852 to complete your return.

We can help you with that. Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

What if I don’t file my taxes before April 15?

If you cannot file your taxes before April 15, you must request an extension of time. If you did not file your return by the due date (including extensions), you may be subject to a penalty for failure to file, unless you have a reasonable cause for failure to file on time. If you did not pay your taxes in full by the due date of the return (not including extensions), you may also be subject to a penalty for failure to pay, unless you have reasonable cause for not paying in a timely manner, or the IRS has approved your request for an extension to pay the owed taxes due to a case of undue damage. Furthermore, you are charged interests for unpaid taxes after the due date, even if you have an extension to file. Also you would be charged interest for penalties.

How to apply for an extension?

If you cannot meet the deadline by April 15 you can get a six month extension to file your taxes by sending Form 4868, “Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.” This form must be submitted by April 15.

We can help you with that.Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

When should I amend my tax return?

The taxpayer should amend his/her tax return when one of the following was not reported correctly:

Civil status
Dependents
Total income
Deductions and credits

We can help you with your amendments. Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

Should I amend my tax return if I notice a mathematical error?

In some cases, it is not necessary. The IRS usually corrects the mathematical errors. Therefore, the taxpayer would not need to amend his/her tax return.

ITIN

Why does an undocumented immigrant need to pay taxes?

Can I file taxes even if I was paid in cash?

How can I file taxes if I do not have a Social Security Number?

What happens if I do not file taxes?

Is my information protected with the IRS? Will they contact the Immigration Service?

According to federal law, your information is protected. The IRS will not contact the Immigration Service unless the individual is under criminal investigation.

Can I get an ITIN for my family members?

Yes, you can request an ITIN for your dependents, but only if they are living in the United States, Mexico or Canada.

Visit our office and, after a short questionnaire, we will exactly tell you the documents you need.

What is an ITIN?

An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal
Revenue Service (IRS) that was first introduced in 1996. It is a nine-digit number that always begins
with the number 9 and has a range of 70-88 (excluding 89 and 93) in the fourth and fifth digit. An example of an ITIN is 9XX-70-XXXX or 9XX-99-XXXX.
The IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but
who do not have, and are not eligible to obtain, a Social Security Number (SSN) from the Social Security
Administration (SSA). Individuals must have a filing requirement and file a valid federal income tax return to receive an ITIN, unless they meet an exception.
The Hispanic community has different names for the ITIN, such as:

Tax ID
Seguro verde
Número verde

Who needs an ITIN?

Foreign nationals and others (documented or undocumented) who have federal tax reporting or filing
requirements and DO NOT qualify for SSNs.

A non-resident alien individual not eligible for a SSN who is required to file a U.S. tax return only to claim
a tax refund under the provisions of a U.S. tax treaty.

Below are other examples of individuals who need an ITIN:

A nonresident alien required to file a U.S. tax return.
A U.S. resident alien (based on days present in the United States) filing a U.S. tax return.
A dependent or spouse of a U.S. citizen/resident alien.
A dependent or spouse of a nonresident alien visa holder.

What are the benefits of having an ITIN?

File taxes (and possibility of a refund).
Claim dependents who are out of the country.
Open a bank account.
Apply for a mortgage or loan (provides a record your annual income. This record is required
in certain cases, such as bank loans, buying a house, etc.).
Document the time they have lived in the United States (very helpful in the event of immigration
reform).
Many public and private entities require a copy of a tax return for transactions and/or for children
registration.
Receive credits toward a Social Security Number.
Filing taxes is considered “good moral character” by the Immigration Services.

What is the cost for the ITIN?

It is our guiding principle to set the standard and offer ITINs completely FREE to all taxpayers and their family members.

Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

When can I apply for an ITIN?

You can apply for an ITIN (complete Form W-7) as soon as you are ready to file a federal tax return. The application can be submitted any time of the year and is not limited to tax season. However,
if the tax return you attach to your ITIN application is filed after the return’s due date, you may owe interest and/or penalties.

If you meet one of the exceptions to the tax filing requirement, you can apply for an ITIN but including supplemental documents to substantiate your qualification for the exception.

Visit our office and, after a short questionnaire, we will exactly tell you what you need.

Is the ITIN valid for employment?

ITINs are for federal tax reporting ONLY, and are not intended to serve any other purpose. IRS issues
ITINs to help individuals comply with the U.S. tax laws and to provide a means to efficiently process and account for tax returns and payments for those not eligible for Social Security Numbers (SSN).
An ITIN DOES NOT authorize work in the U.S. or provide eligibility for Social Security benefits or the
Earned Income Tax Credit.

What documents are needed to apply for an ITIN?

There is a list of 13 documents approved by the IRS. We suggest you consult with your Consular office or visit our office to receive more information about other documents that are acceptable.

IRS will accept either original or certified copies (from the issuing agency) of two or more of the following documents, in lieu of a passport (which is 1):

Passport
National Identification Card (must show photo, name, current address, date of birth, and
expiration date)
U.S. Driver’s License
Civil Birth Certificate (required unless passport is submitted)
Foreign Driver’s License
U.S. State Identification Card
Foreign Voter’s Registration Card
U.S. Military Identification Card
Foreign Military Identification Card
Visa
U.S. Citizenship and Immigration Services (USCIS) Photo Identification
Medical Records (dependents – under 6 only. Only vaccination records are adequate, if the last vaccination occurred within the past 12 months.)
School Records (dependents – under 14, under 18 if a student – only. School term cannot be more than12 months from the date of the application.)

Will the IRS return my original documents? How long will it take to get them back?

The IRS has a process in place to ensure that documents are returned to applicants. The original and
certified documents will be returned to applicants using the mailing address on the application via postage paid standard U.S. mail within 60 days of receipt and processing of the ITIN application.

How long does it take to receive an ITIN?

The ITIN will be received in the form of a letter by mail and will be sent to the address marked in the application. The process usually takes 6 to 8 weeks. It could take a little longer for requests sent during tax season.
If the applicant has not received an ITIN or other correspondence 6 to 8 weeks after applying, the individual must call the IRS toll-free number at 1-800-829-1040 to request the status of the application.

We can help you with that. Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

What can be done to establish a credit once you have an ITIN or Tax ID?

Some private institutions accept the ITIN or Tax ID to help establish credit and you can use the ITIN or Tax ID to open a bank account, buy or rent a home or apartment, buy an automobile, or open your own business. The ITIN is not valid for work in the U.S. and does not change your immigration status.

Do ITINs expire?

An ITIN will expire for any taxpayer who fails to file a federal income tax return for five consecutive tax years. Any ITIN will remain in effect as long as a taxpayer continues to file U.S. tax returns. This includes ITINs issued after Jan. 1, 2013. These taxpayers will no longer face mandatory expiration
of their ITINs, and they do not need to reapply starting in 2018, as was the case under the old policy.
To ease the burden on taxpayers and give their representatives and other stakeholders’ time to adjust, the IRS will not begin deactivating unused ITINs until 2016. This grace period will allow anyone with a valid ITIN, regardless of when it was issued, to file a valid return during the upcoming tax-filing season. A taxpayer whose ITIN has been deactivated and needs to file a U.S. return can reapply again.

Visit our office and, after a short questionnaire, we will exactly tell you the documents you need.

If I cannot get the documents I need to apply for an ITIN, can I apply for a Social Security number instead?

If you qualify for a social security number, you should not be applying for an ITIN.

We can help you find it out. Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

What to do if I get a Social Security Number (SSN)?

Once an individual receives a SSN, you must use that number for tax purposes and discontinue using
the ITIN. It is improper to use both the ITIN and the SSN assigned to the same person to file tax
returns. It is the taxpayer’s responsibility to notify the IRS so the agency can combine all the taxpayer’s
tax records under one identification number. If the taxpayer does not notify the IRS when an SSN
is assigned, the individual may not receive credit for all wages paid and taxes withheld, which could
reduce the amount of any refund due. We can help you with that. Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

What should someone who previously had an ITIN but now has a SSN do?

The taxpayer could amend his/her previous three years of tax returns. In the past, these individuals may not have qualified for certain tax credits or deductions with the ITIN. Now with the SSN, they might be able to recuperate certain tax credits and deductions. With the SSN, the taxpayer can also request to have his/her previous Medicare and SS contributions transferred to his/her new SSN so that he/she can reap the benefits when he/she retire.

We can help you with that. Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

Self-employment

Can I file taxes if I don’t have a Form W-2 or 1099?

What can I do if I forgot to file some extra income?

We can help you with the amendment. Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

What is considered a Self-Employed Worker?

If you carry on a trade or business, are a sole proprietor, or you are a member of a partnership that carries on a trade or business.
In order for an activity to be considered a small business it needs to have certain profit. A certain activity generally is presumed to be for profit if it makes a profit during at least three of the last five tax years, including the current year. If an activity is not for profit, losses from that activity may not be used to offset other income.
You are also self-employed if you have a part-time business in addition to your regular job. Income from your business is considered Self-Employment income.
As a self-employed individual, you are subject to Self-Employment tax and are responsible for payment of all taxes due. (Self-employment taxes: Social Security and Medicare tax).
You are required to provide an identification number on your individual tax return.

Do I have to file taxes if I worked as self-employed?

A taxpayer who works independently or self-employed must file a tax return if the net earnings of the work were at least $400.00 or more during the year.

What documents should self-employed employees keep?

The taxpayer should maintain records that show the source of income and items that support what they have deducted. Some examples of the supporting documents are:

Bank deposit slips
Receipt books
Bills
Cancelled checks and
Credit card receipts or documentation

Would it help me to keep track of my expenses and my mileage?

Yes, the total costs include the total amount of all the deductible business expenses in fact paid during the year. Some examples of these expenses include publicity, legal or professional costs, office costs, repairs, materials and taxes. The cost of property, which is anticipated to last more than a year, should be depreciated. If the taxpayer uses his/her vehicle or truck for business purposes, the mileage can be deducted.

There are many people that have more than one job and are get paid by check and cash. Should they report the cash income?

Yes, it is very important that the taxpayer declares all income generated during the tax year, either income by check or cash. The tax law of this country states that any person who generates income in the United States must submit a tax return and report any generated income.

What expenses can be deducted if an employee is considered self-employed or independent contractor?

It will depend and vary according to the type of business that the taxpayer is working on. The taxpayer should keep a record of income and expenses related to the business and/or work.

For more information about deductions that can be applied to your situation please call us at 757-454-6120 or contact us here.

Can I deduct the material I purchased for my business?

Depending on the type of business; for example, you could deduct the following items:

Tools
Construction machinery
Boots
Uniforms
Cellular

Visit our office and, after a short questionnaire, we will exactly tell you what you could deduct.

Can I deduct the costs of health insurance if I am considered self-employed?

If you are self-employed and have a net profit during the year, you may deduct the amounts paid for health insurance for yourself, your spouse, and dependents.

Are there any disadvantages for the taxpayer who receives payment in cash?

When a person receives payment in cash the employer is not withholding taxes. This means that the taxpayer is responsible for paying the taxes that are due at the end of the year.

Why is it that most contractors need to pay taxes to the IRS?

The average percentage of your taxes withheld is 15% from your monthly salary. If you work as Self-Employed, and you receive your payment in cash, there is no withholding being removed, for Federal, State, Social Security, or Medicare taxes. These four withholding payments are required for all employees who work in the United States.

When someone earns cash, there is not tax withholding. Therefore, that person is liable to pay taxes. Can taxpayers make monthly payments to the IRS in order to avoid any debt at the end of the year?

Yes, taxpayers can perform what is called “estimated tax payments” to the Internal Revenue Service (IRS) in order to avoid declaring their tax debts. By making the “estimated tax payments”, taxpayers shall comply with the payment for federal taxes, state taxes, Social Security and Medicare. These four taxes are required for everybody working in the United States.

What is an installment agreement?

An installment agreement allows you to make a series of monthly payments for a specified period. The IRS offers several monthly payment options, such as:

Direct debit from your bank account,
Payroll deduction through your employer,
Payment by check or money order;
Payment through the Electronic Federal Tax Payment System® (EFTPS);
Payment by credit card, by phone or online, or
Online payment agreement (OPA).

If you decide to join an installment agreement plan, your monthly payment will be based on your ability to pay and should be an amount you can pay each month to avoid noncompliance.

Will the IRS confiscate my assets?

The IRS may also use a levy to collect taxes. The IRS can confiscate assets such as your wages, bank accounts, Social Security benefits and retirement income. The IRS may also confiscate and sell your property in order to satisfy a tax debt. Properties could include your car, boat or real estate. In addition, they can seize state tax refunds or any refund that is owed to you.

If my business goes bankrupt, must I submit a tax return?

Although the business is no longer in operation, the owner remains responsible for submitting the tax return for the business within its corresponding deadlines. If you had employees, you must submit all statements on the payroll as appropriate.

How will I know if an item is deductible?

To be deductible, a business expense should comply with the following two requirements; it should be ordinary and necessary. An ordinary expense is common and acceptable in that field of business, area of commerce or profession. A necessary expense is useful and appropriate for the business, area of commerce or that profession. If the taxpayer is a business owner and operates more than one area of business, he or she may not combine the activities.

Can I deduct medical expenses if I am considered self-employed?

If you are self-employed and have a net profit during the year, you could deduct the payments of your medical insurance for yourself, your spouse and dependents.

Filing Status

Why is my filing status important?

Your filing status will determine your standard deduction. In addition, your filing status will determine if you qualify or not to receive certain deductions and credits.

What are the filing statuses?

There are five civil statuses for tax payment purposes, Single, Married Filing Jointly, Married Filing Separately, Head of Household, and Qualifying Widow(er) with Dependent Child.

How do I know if I am considered NOT married?

You will be considered not married during the entire year if, on the last day of the tax year (December 31st), you are not married or you are legally separated from your spouse by a divorce decree or separate maintenance.

How do I know if I am considered married?

You are considered married during the entire year if on the last day of the tax year (December 31st) you and your spouse comply with the following requirements:

You are married and living together as husband and wife.
You are living together in a common law marriage that is recognized in the state where you now live or in the state where the common law marriage began.
You are married and living apart, but not legally separated under a decree of divorce or separate maintenance.

How do I know if I am considered single?

You are considered single if, in the last day of the year:
• You are unmarried
• You are legally separated under a sentence of divorce or maintenance decree
• You were widowed before January 1, that year, did not remarry and do not have dependent children.

I’m separated of my spouse but we are not divorced, could we filed our taxes together?

Yes, the taxpayers can use the marital status of married filing jointly if they are married and both agree to present a join tax return. Including:

Taxpayers that live together in a marriage of common right recognized in the state where the marriage was carried out,
Taxpayers that live separated but they are not legally divorced and
Taxpayers whose spouses passed away during the year and they have not married again

If I file my income tax return with my spouse, who has to sign it?

Both, the husband and the wife should sign the income tax return. Both are responsible of any tax to be owed. The lowest rates of taxes apply to the married filing jointly status.

I am legally married, would I be able to file my taxes using the married filing separately status to avoid paying the tax debt of my spouse?

Yes, the married taxpayers can elect to file separately using the marital filling separately status. Each spouse will file their taxes separately reporting their incomes and individual deductions.

Is it true that I will pay more in taxes, if I file my taxes as “married filing separately”?

The tax rate for this marital status is the highest. Some taxpayers choose the married filing separately status so one spouse will not be responsible of the tax debt of the other spouse.

When can I file my taxes as Head of Household?

You can file your tax return as a Head of Household if you comply with the following requirements:

You are unmarried or “considered unmarried” on the last day of the year.
You paid more than half the cost of keeping up a home for the year.
A “qualifying person” lived with you in the home for more than half of the year. Except for temporary absences.

What happens if I am divorced or separated?

If you are separated, and if your spouse and you meet certain requirements, you can be considered single or head of household if you have a dependent. You will be able to file your taxes as a head of household although you are not divorced or legally separated.

My spouse passed away during the year; what will be my marital status for purposes of filing taxes?

If your spouse passed away during the year and you did not remarry again, you will be considered married for the entire year and you can file a joint tax return for you and your spouse. In addition, you will have the right, during the two following years, to receive the filling status of widower qualified with dependent child.

What happens if I remarry?

If you get remarried before the tax year ends, you may file your tax return as Married Filing Jointly with your new spouse. The filing status for your deceased spouse will be Married Filing Separately filing a separate tax return.

What happens if my marriage becomes annulled? How can I file my taxes?

If you are granted an annulment of marriage, establishing that your marriage never existed, you will be considered single in that same tax year even though you filed a joint tax return in previous years.

Dependents

If a baby was born in December of this year, can a taxpayer declare the child as a dependent?

According to guidelines of the Internal Revenue Service, a child can be claimed as a dependent the year he or she was born. In this case, the taxpayer may claim the baby in the tax return for the next year even if he/she was born on December 31. The taxpayer should not wait until the next tax season to claim the dependent.

In what countries could our dependents live to be eligible to claim on our tax return?

The dependents could live in the U.S., Canada or Mexico.

When can a child be claimed as a dependent?

In most cases, a child can be claimed as a dependent in the year in which he or she was born.

What type of identification number must the child have in order to be claimed as a dependent?

The child must have a Taxpayer Identification Number (TIN). For children born in the United States, the TIN is generally a Social Security Number (SSN). If the child does not have an SSN and is eligible to receive one, apply for one as soon as possible by filing Form SS-5 with the Social Security Administration. If the child is not eligible for a SSN, you may request an Individual Tax Identification Number (ITIN) from the IRS by completing form W-7.

What tax benefits can I still qualify for if my child has been kidnapped?

A child who has been kidnapped may still qualify you for the following tax benefits:

The exemption deduction for a dependent.
Head of household or qualifying widow(er) with dependent child filing status.
The Child Tax Credit.

For some credits, the taxpayer needs to have a child to qualify for the credit. Is it a requirement to have a child to qualify for the Earned Income Credit?

No, you can qualify for the Earned Income Credit without a qualifying child if you meet the following requirements:

be age 25 but under 65 at the end of the year,
live in the United States for more than half the year, and
not qualify as a dependent of another person.

What are some tax credits and benefits that taxpayers with children may be entitled to?

Here is a list of some tax credits and benefits taxpayers with children may be entitled to:

Child Tax Credit
Additional Child Tax Credit
Child and Dependent Care Credit
Adoption Credit
Earned Income Tax Credit

What is the Additional Tax Credit?

The Additional Tax Credit is a tax credit for individuals who do not benefit from the full amount of the Child Tax Credit. The Additional Child Tax Credit may give you a refund even if you do not owe any tax.

What is the Child Tax Credit?

The Child Tax Credit is a tax credit that can reduce your tax. You may be able to take a credit on your tax return for each of your children under age 17.

What if my child died in the year of birth?

If your child was born and died in the same year and you did not have a SSN for your child, you may attach a copy of the child’s birth certificate to the tax return.

Tax Credits

For some credits, the taxpayer needs to have a child to qualify for the credit. Is it a requirement to have a child to qualify for the Earned Income Credit?

No, you can qualify for the Earned Income Credit without a qualifying child if you meet the following requirements:

be age 25 but under 65 at the end of the year,
live in the United States for more than half the year, and
not qualify as a dependent of another person.

What are some tax credits and benefits that taxpayers with children may be entitled to?

Here is a list of some tax credits and benefits taxpayers with children may be entitled to:

Child Tax Credit
Additional Child Tax Credit
Child and Dependent Care Credit
Adoption Credit
Earned Income Tax Credit

What is the Additional Tax Credit?

What is the Child Tax Credit?

The Child Tax Credit is a tax credit that can reduce your tax. You may be able to take a credit on your tax return for each of your children under age 17.

Are there any student tax credits for higher education?

Yes, there are two tax credits for people who pay higher education expenses:

American Opportunity Tax Credit
Lifetime Learning Credit

You can choose only one of two credits per student per year. For example, if a student is entitled to the American Opportunity Tax Credit and also entitled to Lifetime Learning Credit during the same year, he/she can only claim one, but not both. If a student is not claimed as a dependent on the tax return of another person, only the student can claim the credit. All inquiries, estimates, tax return reviews from previous years, and ITIN applications for you and your family are free. Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

What is the Earned Income Tax Credit?

Earned Income Credit is a refundable credit for certain qualified workers. The objective is to help compensate for some increases in the cost of living and in Social Security taxes. The credit decreases owed taxes, if any, and can result in a refund for the taxpayer.

Is there a citizenship or permanent residence requirement to qualify for the Earned Income Tax Credit?

Yes, the taxpayer must be a U.S. citizen or a resident alien with a valid SSN. This means that if the taxpayer was a non-resident foreigner during any part of the year, he/she will not be able to claim the Earned Income Credit, unless his/her filing status is married filing jointly with a U.S. citizen or resident alien.

What filing status meets the requirement to qualify for the Earned Income Credit?

There are three filing statuses that meet the requirement:

Single
Married (filing jointly)
Head of household

However, there are married taxpayers who prefer to file a separate tax return instead of filing jointly. The IRS says that if the taxpayer is married, he/she must file jointly to claim EIC. Therefore, the filing status cannot be “Married filing separately.”

Expenses / Deductions

How will I know if an item is deductible?

Can I deduct medical expenses if I am considered self-employed?

If you are self-employed and have a net profit during the year, you could deduct the payments of your medical insurance for yourself, your spouse and dependents.

I pay child Support. Can I deduct child support in my taxes?

No, child support payments made to another person are not considered deductible expenses on your tax return.

If you are unemployed and are looking for a new job, should you report the expenses generated by this search?

Yes. It is important to state the mileage of your car, other transportation expenses, and expenses incurred to make copies of your resume.

Should I itemize my deductions?

In general, the taxpayer has to decide whether to itemize deductions or utilize the standard deduction. The standard deduction is an amount of money (in dollars) that reduces the taxable income. You should itemize deductions if your allowed deductions are greater than the standard deduction.

When can a taxpayer utilize an itemized deduction?

Generally when you cannot utilize a standard deduction.
You had high medical and/or dental costs and don’t have medical insurance.
You paid house interests or taxes.
As an employee, you had high work-related expenses that were not reimbursed.
You had uninsured losses due to natural disasters or theft.
You had high charitable donations.
Generally, when you are married and file a “married filing separately” tax return and your spouse itemizes his/her deductions.

When can a taxpayer NOT utilize an itemized deduction?

Are a non-resident foreigner or a foreigner with double citizenship during the year.
Are filing a tax return for a period of less than 12 months due to a change in your accounting method.

Could I deduct medical expenses if I choose to itemize my deductions?

If you itemize your deductions, you can deduct your medical expenses (dental expenses, too) that you, your spouse or dependents incurred during the year.

What is the amount of medical and/or dental expenses that can be deducted?

You can only deduct your total medical expenses incurred during the year that exceed 7.5% of your adjusted gross income. We can help you calculate this amount. Click here to make an appointment with Zigma Tax Service Today or call 757-454-6120.

What type of medical expenses can I include?

You are only allowed to deduct expenses paid mainly to prevent or alleviate a physical or mental illness or defect.

What are some examples of these prevention and alleviation medical expenses?

These include payments for diagnosis, cures, alleviation, treatment or prevention of illnesses or the treatment that affects a part or functioning of the body. These expenses include payments for legal medical services furnished by professional doctors and the cost of equipment, materials, and services used in the diagnosis for the purpose of medical care.

Students

Are there any student tax credits for higher education?

Yes, there are two tax credits for people who pay higher education expenses:

American Opportunity Tax Credit
Lifetime Learning Credit

As a full-time student, am I exempt from federal taxes?

There is no exemption from tax for full-time students. Every U.S. citizen or resident must file a U.S. income tax return if certain income levels are reached.

What is Form 1098-T?

Form 1098-T is a Tuition Expenditure Report that summarizes the amount a person paid for higher education qualified expenses. The college student will receive Form 1098-T showing the amount of all expenses for an academic period.

What requirements must a person have to be considered a “student”?

For purposes of tuition and education expense deductions, a “student” is a person who is enrolled in one or more courses at a qualified institution of higher education (i.e. post high school). This person must have a high school diploma or GED and be enrolled in one or more higher education courses.

Can a parent report Form 1098-T instead of the student?

To claim a student’s deduction for qualified tuition and education expenses, the parent must have paid the expenses and have claimed an exemption for the student as a dependent.

How can a student receive these credits?

There are certain requirements that students must meet to receive one of these credits. For example, some credits apply only to the first four years of college while others are available for all years of higher education.

Identity Theft

Does the IRS initiate contact with a taxpayer by email?

The IRS does not initiate contact with a taxpayer by e-mail.

If I receive a fraudulent IRS email, where should it be sent?

If you receive a scam e-mail claiming to be from the IRS, forward it to the IRS at [email protected]

What should I do if I am a victim of identity theft?

If you are a victim of identity theft, the first thing to do is to report this to the IRS. We also suggest you go to a police station and make a written statement. Keep a copy of this information and be sure to alert your credit card company, banks, your child’s schools, employer, and everyone who may have your personal information for credit or loan purposes.

What are the methods used by Identity thieves?

Identity thieves get your personal information by many different means, including:

Stealing your wallet or purse
Posing as someone who needs information about you through a phone call or e-mail
Looking through your trash for personal information
Accessing information you provide to an unsecured Internet site

What should I do if I come across a website claiming to be from the IRS?

If you discover a website that claims to be the IRS but does not begin with ‘www.irs.gov’, forward that link to the IRS at [email protected]

What can happen if someone steals my Social Security Number?

If your Social Security number is stolen, another individual may use it to get a job. That person’s employer may report income earned by them to the IRS using your Social Security number, thus making it appear that you did not report all of your income on your tax return.

What should you do if your identity has been stolen?

Your identity may have been stolen if a letter from the IRS indicates more than one tax return was filed for you or the letter states you received wages from an employer you don’t know. If you receive such a letter from the IRS, leading you to believe your identity has been stolen, respond immediately to the name, address or phone number on the IRS notice.

Can my tax records be affected when my identity has been stolen?

If your tax records are not currently affected by identity theft, but you believe you may be at risk due to a lost wallet, questionable credit card activity, or credit report, you need to provide the IRS with proof of your identity. You should submit a copy of your valid government-issued identification – such as a Social Security card, driver’s license, or passport – along with a copy of a police report and/or a completed Form 14039, Identity Theft Affidavit. As an option, you can also contact the IRS Identity Protection Specialized Unit, toll-free at 800-908-4490. You should also follow FTC guidance for reporting identity theft.

Should I always present documents that show my Social Security Number?

Show your Social Security card to your employer when you start a job or to your financial institution for tax reporting purposes. Do not routinely carry your card or other documents that display your Social Security number.

Is there a website that provides information on Identity Theft?

For more information about identity theft – including information about how to report identity theft, phishing and related fraudulent activity – visit the IRS Identity Theft and Your Tax Records Page.