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FREQUENTLY ASKED TAX QUESTIONS
Here are some common questions clients have about taxes, alongside clear answers provided by our experts.
For tax filing, essential documents include W-2 forms for employment income, 1099 forms for other income sources, previous year’s tax returns, bank statements, and documentation for deductible expenses such as mortgage interest and property taxes.
You can check the status of your tax refund by visiting the IRS "Where's My Refund?" tool online. You’ll need to provide your Social Security Number, filing status, and the exact refund amount claimed on your return.
If you can't pay your tax bill in full, consider setting up an IRS payment plan. You can apply for an Installment Agreement, allowing you to pay off your balance over time. Visit the IRS website to apply online or contact them directly for assistance.
Eligibility for tax credits depends on various factors, such as income level, number of dependents, and filing status. Common tax credits include the Earned Income Tax Credit (EITC), Child Tax Credit, and the American Opportunity Credit. Reviewing IRS guidelines or consulting with a tax professional can clarify your eligibility.
To file an extension, submit IRS Form 4868, "Application for Automatic Extension of Time to File U.S. Individual Income Tax Return," by the tax filing deadline. This grants you an additional six months to file your return; however, it doesn’t extend the deadline for paying taxes owed.
If you file your taxes late, you may face a failure-to-file penalty, which is typically 5% of the unpaid taxes for each month your tax return is late, up to 25% of your unpaid taxes. If you are unable to pay, the penalty for failure to pay applies.
Yes, you need to report any taxable events related to cryptocurrency, such as selling or converting to cash. Cryptocurrencies are considered property by the IRS, and capital gains or losses must be reported on your taxes, similar to stocks.
