The 5 Most Common Tax Questions, Answered

As the April 17 tax deadline draws nearer, procrastinators across the nation are feeling the pressure to get their 1040s in on time. However, what often holds these taxpayers back from filing in a timely manner is a major question regarding their tax situation with an elusive or confusing answer.

According to search engine analytics data, there are five questions surrounding taxes that individuals are constantly looking for answers to on the Web. So here they are--the top five most common tax questions, answered:

1. How much money do I have to make to file taxes? It might seem like one of the few upsides to making hardly any money is that you don't have to worry about doing taxes for that year. Anyone who earns under a certain income, determined by age, dependency, and filing status, is exempt from having to report those earnings to the IRS. For an independent, single person under the age of 65, for example, that number is $9,500 (efile.com provides a table that breaks it all down.)

You may want to think twice about ignoring tax day, however, even if you made only a few hundred dollars throughout the year. There are a number of tax credits that you could qualify for, but they require a tax return to receive them. At the very least, you likely had tax withheld from your paychecks--however small they may have been--which you could have refunded by filing a tax return.

2. How can I estimate my taxes quickly online? Maybe you're not quite ready to file your taxes, but you do want an idea of how much you'll get back from--or pay to--the IRS. This can be helpful in planning major expenditures around April. Luckily, there are a number of tax services that will allow you to enter basic information and see an estimated refund or payment total, like efile.com's 2012 Tax Estimator or TurboTax's TaxCaster, without committing to filing at that moment.

3. Where are school expenses listed on Schedule A? If you're itemizing deductions this year, you will list them all on a Schedule A, which accompanies your Form 1040. However, if college costs are included among the expenses you plan to write off, the deductions should be reported directly on your Form 1040 (line 34), rather than the Schedule A. Known as the Tuition and Fees deduction, you will need to fill out a Form 8917 to determine the deductible amount, and include the form along with the rest of your return.

4. Do I have to pay taxes on Social Security disability benefits? In most cases, yes. According to the Social Security Administration website, you must claim your Social Security benefits as income if you are filing a federal tax return as an individual and your total income is over $25,000. For joint filers, the combined income must total more than $32,000. If you're not sure whether your benefits are taxable, you can refer to the back of your benefits statement--there's a short worksheet that will help you figure it out.

5. Do I have to list last year's state tax refund as income this year? Normally, you don't have to claim a previous tax refund as income the following year, because your refund is the money owed to you by the IRS. However, if you itemized your deductions last year (instead of claiming the standard deduction) and included your state or local income taxes as a deduction, the refund you earn as a result might actually be considered income for the year you receive it. If you did itemize state income taxes, you should get a 1099-G in the mail (one is sent to the IRS by the state as well). However, receiving a 1099-G doesn't necessarily mean you need to pay additional taxes--you can refer to your Form 1040 instructions for the State and Local Income Tax Refund Worksheet to find out if that refund was, in fact, taxable.

Of course, when it comes to taxes, things are rarely simple. If you have any lingering doubts about your taxes, talk to a professional before submitting them to the IRS. The only thing worse than struggling to complete your taxes on time is finding out they're wrong.

Casey Bond is editor-in-chief of www.GoBankingRates.com, which provides readers informative personal finance and investing content, as well as the best interest rates on financial services nationwide.



More From US News & World Report
Loading...
 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.2526-0.0001-0.01%
    USDSGD=X
    1.7302-0.0002-0.01%
    EURSGD=X
    2.1033-0.0002-0.01%
    GBPSGD=X
    81.7693+0.00190.00%
    SGDJPY=X
    6.1905+0.0004+0.01%
    SGDHKD=X
    2.5850+0.0002+0.01%
    SGDMYR=X
    9,116.9668-3.3359-0.04%
    SGDIDR=X
    4.9692-0.004-0.08%
    SGDCNY=X
    1.1684-0.0007-0.06%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,295.80-7.90-0.61%
    GCQ14.CMX
    19.65+0.02+0.08%
    SIK14.CMX
    90.18-0.65-0.72%
    ^XAU
    3.04+0.02+0.51%
    HGK14.CMX
    104.59+0.83+0.80%
    CLK14.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.73+0.08
    ^FVX
    2.72+0.08
    ^TNX
    3.52+0.06
    ^TYX

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.115-0.002-1.71%
    B22.SI
    0.48+0.020+4.35%
    5GJ.SI
    2.27+0.090+4.13%
    5ME.SI
    2.190.0000.00%
    JS8.SI
    0.61+0.005+0.83%
    E5H.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.162+0.034+26.56%
    5GF.SI
    0.20+0.034+20.48%
    5WD.SI
    0.59+0.050+9.26%
    L5I.SI
    0.28+0.020+7.69%
    C33.SI
    0.215+0.015+7.50%
    5UE.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.103-0.010-8.85%
    5OS.SI
    0.112-0.008-6.67%
    5RC.SI
    0.355-0.025-6.58%
    KJ9.SI
    0.215-0.015-6.52%
    F9M.SI
    0.29-0.020-6.45%
    5PC.SI