Do you know these tax facts?

As you enjoy the mid-June sunshine, take a moment to brush up on some important tax facts. In this post, you’ll find answers to commonly asked questions and useful tax tips that can help you navigate various financial scenarios with confidence.

  1. Did you know you can claim a dependent who is not biologically related to you or related through marriage?

    If you care for someone who lived with you all year and provided over half of their support, they might qualify as a dependent. Other factors include whether they are a qualifying child of another, marital status, and earned income amounts.

  2. Did you know that IRS debt can cause your passport to be revoked?

    If you have a seriously delinquent tax debt of $62,000 or more and are not in a payment plan, the IRS can revoke your passport.

  3. Did you know unemployment benefits are taxable?

    Yes, receiving state unemployment benefits is subject to taxation.

  4. Did you know that if a credit card or financing company cancels your debt, it is considered income?

    You must pay taxes on the canceled amount unless you qualify for an exclusion.

  5. Did you know that if you receive gambling winnings in a state where you don’t live, you may be required to file a return in that state?

    Non-resident returns may be required depending on the state’s filing requirements for amounts earned.

  6. Did you know that child support is not tax-deductible?

    Even if you pay child support, you may not be eligible to claim those children as dependents on your tax return.

  7. Did you know that filing a tax return extension does not extend your time to pay the IRS?

    Federal and state taxes are still due on the original filing deadline.

  8. Did you know the IRS continues to charge penalties and interest even if you are in a payment plan?

  9. Did you know that income from hobbies (non-profit motivated activities such as selling crafts or farming) is taxable, but the expenses may not be deductible?

  10. Did you know that interest you pay on a student loan is deductible?

    Also, if you paid tuition to a college or university, you may qualify for tax credits.

Please note that the items listed above relate to current 2023 tax regulations, and these facts may vary as laws and regulations change from year to year. Stay informed and ahead of your tax obligations with our expert guidance!

Contact us at 417.380.5000 or at transportation@abacus.cpa.