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What a Dependent is! How to Fix if Denied! Why So Important!

Posted by Felix Assivo on
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Health & Wellness
What a Dependent is! How to Fix if Denied! Why So Important!

The year 2021 is probably the most important year ever to have your qualified child or children claimed on your 2020 tax return. But, who is my qualifying child? What if parents are divorced? Who claims the children on their tax return? What can I do if a my child is claimed on a tax return before I filed my 2020 tax return? The answer to these questions are essential with the passage of the American Rescue Plan Act in March 2021. There are new rules for 2021 only for the child tax credit, and how you filed your 2020 tax return will affect who receives the advance child tax credit. These advance payments have already started and will be reconciled on the 2021 tax return filed in 2022. Get up to speed on all the details and where you can get more information as the with the advance Child Tax Credit payments already being sent out.

Click here for all that you need to know!

Tax Questions 2.0 and More With The Tax Answers Advisor

Posted by Felix Assivo on
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Business
Tax Questions 2.0 and More With The Tax Answers Advisor

Questions! Questions! Questions! The questions never end when it comes to personal and business income taxes. As the 2022 tax season approaches, we have accumulated even more common questions individuals and businesses ask. When does an income tax return has to be filed? Are the stimulus checks income? Are the Advance Child Tax Credit payments taxable income? So many questions individual taxpayers are asking. Business and self-employed taxpayers are asking even more questions such as: What are business meals? What is self-employment tax? Should the business take bonus depreciation or depreciate over time? These and so many more questions will be covered this week on The Tax Answers Advisor.

Click here for the tax answers from The Tax Answers Advisor.

Child Claimed on Another Tax Return?

Posted by Felix Assivo on
0
Kids
Child Claimed on Another Tax Return?

Several times during tax season we electronically file a client’s tax return, only to learn that one of the client’s legal dependents was claimed falsely on another tax return. Sometimes this is due to identity theft, which will be discussed in another blog. More often this situation arises because an ex-spouse, a grandparent, or another ineligible family member has the child’s information and claims the child, even though they did not have the child for at least 6 months or provide 50% or more of the child’s support. Unfortunately, many tax preparers simply tell their clients that there is nothing that can be done since the child has already been claimed. Such a statement is wrong and misleading, because there are procedures that can be followed to get you the child exemption you deserve and qualify for.

How can you get the exemption for your qualified child? When the taxpayer enters our office with this problem we discuss with them how the problem can be fixed. We suggest the taxpayer gather documents that support their claiming the child. Once these documents are gathered, we attach the documents to the prepared tax return. We have the taxpayer then mail the tax return to the proper IRS office.

In about 6 to 8 weeks the taxpayer receives their refund from the IRS. Occasionally, the IRS may request additional documents to support your claiming the child. The IRS then will allow your claiming the child and give you the exemption. Then the IRS will contact the taxpayer who falsely claimed the child and request payment back of any tax benefits received from claiming a child they were not eligible to claim.

There is no race to see who can claim the child first. The tax law plainly states that the qualified taxpayer is the party that can properly and legally claim a child on a tax return.

We specialized in helping our clients to resolve such issues and get the maximum refund they deserve.  Listen to my podcast, “Who is my dependent?” for more information.

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