Top Tax Questions

Find answers to common tax questions and maximize your tax refund.

1. What is the Earned Income Tax Credit (EITC) and how do I qualify?

The United States federal Earned Income Tax Credit (EITC or EIC) is a refundable tax credit that helps working people with limited income. The EITC helps you pay less in payroll taxes. You and anyone else on your tax return (spouse and/or dependents) must have a valid Social Security Number to qualify. The maximum credit ranges from $487 if you don’t have qualifying children up to $6,044 if you have three or more qualifying children.

Your earned income and adjusted gross income (AGI) for 2013 must each be less than the following amounts:

Number of Qualifying Children

Single

Married Filing Jointly

3 or more

$46,227

$51,567

2

$43,038

$48,378

1

$37,870

$43,210

0

$14,340

$19,680

Find more information about the EITC.

2. How can I estimate my tax refund?

The amount of money you get back (or have to pay) depends on two major factors: your income and how many dependents you have. You can use this free tax refund calculator to estimate your refund or the amount you’ll owe.

3. I made less than $16,000 in 2013. Do I still have to file a tax return?

This depends in part on your filing status, age, and gross income. If you’re single, you must file a tax return if your gross income was at least $9,500 ($19,000 if married and filing jointly). Even if you’re not required to file a tax return, there’s little harm in filing, especially if you had income tax withheld from your pay or if you qualify for the Earned Income Tax Credit or the Additional Child Tax Credit.

4. I lost my job in 2013 and I got unemployment insurance. Will that affect my tax return?

You must include any unemployment compensation you received as part of your gross income on your tax return. You should receive Form 1099-G with the amount of unemployment compensation you received. If you received worker’s compensation you do not need to include that as unemployment compensation since it’s a different program.

5. I owe money on my income taxes from last year. Can I still get a tax refund this year?

The IRS will most likely automatically apply your refund to any past due amounts. Your refund this year is not a substitute for your payments owed from last year. If you owe any federal tax, state tax, student loans, or child support, your refund may be withheld.

6. My son is 26, just finished community college, and is living at home with me until he gets a job. Can I still claim him as a dependent?

Your son, despite being unemployed, doesn’t automatically qualify as a dependent. Although there are some exceptions, your child must meet the following conditions in order to be considered a dependent:

  • Must be your son, daughter, stepchild, foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of any of them.
  • Must be (a) under age 19 at the end of the year and younger than you (or your spouse, if filing jointly), (b) under age 24 at the end of the year, a full-time student, and younger than you (or your spouse, if filing jointly), or (c) any age if permanently and totally disabled.
  • Must have lived with you for more than half of the year.
  • Must not have provided more than half of his or her own support for the year.
  • Must not be filing a joint return for the year.
  • If another person can claim your child as a dependent, you must be the person entitled to claim the child as a qualifying child.

7. My friend isn’t getting a refund in cash, instead she is investing it and even getting savings bonds. Why wouldn’t I want a cash refund? And, is it true that I can purchase savings bonds with my refund?

While a cash refund might be your best option if you have high interest credit card debt to pay off, or if you have little in your savings account, your money will do a lot more for you if you invest it. You can invest your refund in a lot of different ways.

As of 2010, you CAN use your tax refund to invest in savings bonds. Learn more about savings bonds and other options to save and invest your money.

8. I pay child support. Does that affect my taxes in any way?

No, child support payments are not deductible by the payer and they’re not considered taxable income by the parent who receives them. However, if your child lived with you for the greater part of the year and you are the custodial parent, you can generally claim the exemption for the child.

9. I received an email message saying the IRS needed to confirm my personal information. Could it be a scam?

The IRS does not send emails asking for taxpayer’s personal information. Phishing is an online con game where Internet criminals, called phishers, try to steal your identity and money by sending an e-mail asking you to give private information. Scams also take place by phone, fax, websites and social networking sites. Visit the official IRS site to find consumer alerts and report scams. Also, learn more about Internet safety.

10. I bought a home in 2013. Can I claim the homebuyer tax credit?

The first-time homebuyer credit is no longer available. Some homebuyers who purchased their first home in 2009, 2010 or 2011 were able to take advantage of the first-time homebuyer credit. However, you can deduct interest paid on your mortgage loan and real estate taxes you paid for your home.

Remember, the deadline to file your taxes is Tuesday, April 15, 2014.