05 Dec Top 7 FAQs About Tax Season
When the tax season comes, most people have a lot of questions. We start preparing to file taxes, and with everything you manage to complete, more problems arise that require answers from a professional.
If you are equally confused and seek answers to many questions, know that you’re not alone. More importantly, you’ll most likely find all the answers you need in this article.
1. What is the Minimum Income Level Required for Taxes?
Unfortunately, we don’t have an exact answer as it all depends on several factors like income source, filing status, etc. In the most general terms, if your total income surpasses $10,000, then you will have to pay federal taxes. The number is much worse for freelancers who have to pay taxes if they earn more than $600.
2. When Should I File My Taxes?
Whenever you want is the answer, as long as it’s before the deadline. It’s always recommended to start a month or more in advance because there’s still that slight chance that something will go wrong. It will quickly get you to exceed the deadline, and that will imply some hefty fees.
3. When are My Taxes Due?
The deadline is always the same for everyone, and usually, it falls on April 15. But if it’s a Sunday or a holiday, then the day is moved to the next one. For example, this year, since the 15th was a Sunday and the 16th was a holiday, the deadline was pushed to April 17.
4. What Can You Expense?
Taxes are a bit tricky when you’re a freelancer. And since 36% of the U.S. workforce are freelancers, this question is undoubtedly a pervasive one. Also, almost everything can expense as long as it was purposed for business.
5. Do Tax Audits Affect My Credit?
It doesn’t affect your credit if you merely owe money to the IRS, but how you choose to pay your taxes certainly does.
All in all, you might want to avoid audits anyway as they bring nothing but headaches.
6. What’s the Earned Income Tax Credit and Do I Qualify?
The EITC is a tax benefit reserved for low-income families, and in some cases for middle-income families as well. There are several requirements here that you need to meet to qualify for this benefit, most of which are quite complicated to understand. As each case is different, you can always seek the help of a skilled professional who will see if you qualify or not.
7. Do I Need to Keep My Tax Documents and for How Long?
Yes, you most certainly should keep your tax documents, and it’s generally recommended to do so for seven years. If the IRS decides they want to audit you, they will ask you for the last three years’ worth of documents, and they can even extend it to six years. You should keep the tax returns themselves forever.
So, that about covers all the main questions most people have. If by any chance, you fail to find the answer to your question you have here, you can always contact Golden Tax Relief! We will be more than happy to help you and give you all the additional advice you need.