February 2012 * Tax Tips from Smith, Sullivan & Company P.C. 
  
This month:

* Can I Claim My Mother As a Dependent?  
* Common Tax Return Mistakes to Avoid
* Missing, Lost or Never Received W2: What to Do?

 
Defining Dependents and Exemptions

Everyone who files a federal income tax return will have the opportunity to declare dependents and exemptions. To make sure that you are filing correctly, review the information below.

1. Exemptions reduce your taxable income. There are two types
of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,700 on your 2011 tax return.

2. Your spouse is never considered your dependent.
On a joint return, you may claim one exemption for yourself and one for your spouse. If you're filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.

3. Exemptions for dependents.
You generally can take an exemption for each of your dependents. A dependent is your qualifying child or qualifying relative. You must list the Social Security number of any dependent for whom you claim an exemption.

4. If someone else claims you as a dependent you may still be required to file your own tax return. Whether you must file a return depends on several factors including the amount of your 
unearned, earned or gross income, your marital status and any special taxes you owe.

5. If you are a dependent, you may not claim an exemption.
If someone else - such as your parent - claims you as a dependent, you may not claim your personal exemption on your own tax return.

6. Some people cannot be claimed as your dependent.
Generally, you may not claim a married person as a dependent if they file a joint return with their spouse. Also, to claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year. There is an exception to this rule for certain adopted children. See IRS Publication 501, Exemptions, Standard Deduction, and Filing Information for additional tests to determine who can be claimed as a dependent.

7. Can I claim my mother as dependent? In order to claim your elderly loved one as a dependent on your taxes, you must meet certain criteria.
  • You (the caregiver) cannot be claimed as a dependent by another taxpayer.
  • They must be a resident of the U.S., Canada or Mexico.
  • They cannot file a joint tax return with a spouse.
The person who you want to claim as a dependent must be a relative. Relatives who quality who do not have to live with you include: mother, father, grandparent, stepmother, stepfather, mother-in-law, father-in-law. Your loved one's gross income for the year must be less than $3,650. Social Security normally is excluded, but if they have other income, which in many cases means interest and dividends, some is taxable.

For more information on claiming an elderly relative as a dependent, see IRS Publication 501: Exemptions, Standard Deductions and Filing Information .

Contact us if you need help with determining your dependents and exemptions!
Avoid the Most Common Tax Return Mistakes
  
This tax season, make it a point to slow down and double check that tax return before you file. Get everything together, keep good records, and it will be a smooth process. The main culprit behind most errors is a lack of organization. 

Here are some common mistakes to look for: 

Check your math. * Make sure Social Security number is correct and on all pages of your return. Include all Social Security numbers for your dependents. * Verify that your filing status is correct.  Claim those retirement account contributions. * Poor record keeping * Not signing and dating your return * Missing forms

Some of the issues can certainly be avoided by e-filing. Contact us if you need help with with your tax returns!

Missing, Lost or Never Received A W-2?  What To Do 

 

You must have your W2 in order to accurately pay and file current or old taxes. Employers, by law, have until
February 1, 2012, which means you should be concerned if you are reading this and still don't have your W-2.

Here Are A Few Ways or Steps On How To Request Your W-2

1.  Contact Your Employer 
Have you changed your address? Sometimes your W2 can simply get lost in the mail. Contact your previous or current employer for your W2. Read on if you need a W2 from an employer no longer in business. Make sure you ask your employer how long they think it will take for them to get your W2 to you.

2. Call the IRS
Call the IRS at 1-800-829-1040 if you cannot obtain your W-2 from your employer or previous employer, When you call the IRS make sure you have the following:
  • Employers Name, Address, City, State, and Zip 
  • Your Social Security Number, City State, and Zip 
  • Estimation of wages earned, withheld, and how long you worked at that job  
You can always look at your last pay stub or pay statement or even a mid-year statement to make an approximation for payment, as you can always request an extension to file (which is not an extension to pay). 

3. Contact the IRS and Request W-2 Information Using Form 4506 
Contact the IRS to obtain the information you need by filing out Form 4506-T (Request for Transcript of Tax Return). Be very specific about the dates you need to receive. Make sure that you check number 8 on the form if you want W-2 Information. To get a copy of Form W-2, use Form 4506 - Request for Copy of Tax Return. Each year requested will cost you $57.00. Read the directions on the form and make sure to send a check made out to the US Treasury for the total amount if using Form 4506.

Contact us if you need more information or help with your tax return.

    

Questions on your tax returns? 

Call us at 508.871.7178 or email: contact@smithsullivancpa.com  

or go to:  www.smithsullivancpa.com 

   

  

  

  

  

  

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