1. Will I save money by filing a separate return instead of jointly with my spouse?

Sometimes you may benefit from filing separately, however, this is usually not the case. Checking the filing separately option is a good idea when:

• The spouses’ incomes are about equal because (AGI) Adjusted Gross Income floors for taking some deductions will be computed separately.
• One spouse has large medical expenses, casualty losses, or other large itemized deduction

2. I don’t make enough money to pay federal income taxes. I was told that I should talk to a professional because I may get extra money back if I file. Is that true?

There is a refundable tax credit called the (EIC) earned income credit. Even if you are not paying federal income taxes because the (EIC) earned income credit is refundable you could get up to $7,430 for tax year 2023.

The (EIC) earned income credit is calculated with a formula that takes into account family size and income. In 2023 the income limits range from $17,640 for those filing single with no children to $63,398 for couples filing jointly with three or more children.

3. I’m in college. Do I need to file a tax return?

Filing or not filing depends on whether you have taxes withheld from your paychecks and secondly, it depends on your amount of income.

Students who are single and earned a Gross Income of more than $13,850 in 2023 are required to file an income tax return. Gross Income includes money from “earned income” (money received from a job or jobs) and unearned income (such as interest, dividends, or other investments). Besides the Gross Income total consideration, students must also file a return if their unearned income (such as unemployment compensation, interest, and dividends) is greater than $1,250.

If there were taxes withheld from your pay you may want to file a return even if you are not required to file. In the situation that tax was withheld, filing your return could result in a refund.

CAUTION: Before Filing – Talk to your parents! Find out whether or not they will be claiming you as a dependent so you can coordinate the information on your returns.

4. I am not a professional gambler. Is there any way to write off my losses?

Yes, you can deduct your losses up to the amount of your winnings. The key is records, you must itemize deductions on Schedule A (Form 1040) and have records of your winnings and losses. Keep an accurate diary, journal, or similar document. This record should include receipts, statements, tickets, or other documents. These records must accurately show both the losses and the winnings.

5. I looked at last year’s return and found a deduction I missed. What should I do?

In most cases, you have up to three years after the filing deadline for that year to file an amended return. You would file Form 1040-X with changes and must also submit any additional forms that were affected by the changes. If you are claiming additional deductions or credits, you can get an extra refund.

Premier would be able to review your return, verify any errors, help you make the corrections and, in most cases, file the amended return electronically.

6. Can I take a home office deduction if I worked at home several days a week instead of going to the office?

You can only take the deduction if you are self-employed. After a prior year tax law change, those who work remotely for an employer (w-2 employee) can no longer deduct home office expenses. There are some very limited specific groups of exceptions to this rule. W-2 employees who may be able to claim work-from-home tax deductions are certain performing artists, Armed Forces reservists, fee-based state or local government officials, individuals with physical or mental disabilities, and teachers.

Self-employed people, however, can deduct their business use of their home if they meet all the criteria which includes using part of their home “regularly and exclusively” for business. The home office doesn’t have to be a separate room but it must be an area where you don’t do anything else – so, your dining room table or your kitchen counter will not meet this test. Your home must also be the principal place of your business. For a full explanation of tax deductions for your home office refer to IRS Publication 587, Business Use of Your Home, or give Premier a call at 717-677-9556.