Frequently Asked Questions (FAQs)
Do I have to file taxes?
Whether or not you have to file taxes depends on your income level. This amount varies depending on your age, filing status, and type of income you have received.
It is also important to know that it may be beneficial for you to file even if not required to do so. Specifically, if you are entitled to a refund, you should file. Additionally, if your income is below a certain level you may qualify for the Earned Income Tax Credit (EITC). This credit can be substantial and certainly makes filing the tax return worthwhile.
Under what circumstances am I allowed to claim another person as my dependent?
There are seven tests that need to be met if a taxpayer is to claim another person as a dependent. If a dependent does not qualify as a qualifying child, he/she may qualify as a qualifying relative. The tests for qualifying child are:
- Relationship
- Age
- Residency
- Support
- Dependency (taxpayer)
- Married Filing Jointly
- Citizenship or Residency
If both parents meet the requirements for claiming a qualifying child as a dependent, then Tie-Breaker Rules are applied. For a discussion of how these tests and rules apply, please call or email me for an appointment.
Can I file as Head of Household?
The Head of Household Status is most often more beneficial than the Single filing status. The standard deduction is higher, and the tax rates are better than for Single or Married Filing Separate (MFS). Three conditions must be met in order to claim the Head of Household filing status:
- Unmarried or Considered Unmarried
- Cost of Keeping Up the Home
- Qualifying Person
For more information, please call or email me for an appointment.
Do I qualify for the Earned Income Credit?
In order to qualify for this credit a taxpayer must meet certain tests or conditions. These tests include:
- Earned Income
- Citizenship
- Taxpayer Identification
- Filing Status
For a discussion of how these tests and rules apply, please call or email me for an appointment.
Is my Social Security income taxable?
Generally, if social security benefits are your only source of income, those benefits are not taxable. If you have significant other income in addition to your benefits you may have to pay taxes on a portion of these benefits (up to 85%).
Are my disability benefits taxable?
For most people Social Security Disability income (SSDI) is not taxable. If you or your spouse have another source of substantial income ($25,000+ for an individual and $32,000+ for a married couple), some of your SSDI benefits may be taxed at your marginal rate by the IRS.
Supplemental Security Income (SSI) is not taxable by the IRS or the state of Colorado.