Tax: FAQ

TAX | FAQ


Am I required to file a tax return if I am applying for citizenship?
If I receive cash as income or receive a 1099, am I required to pay estimated tax payments?
Can I use my personal checking account to pay for business expenses?
I retired last year, and began receiving social security payment. Do I have to pay taxes on my social security benefits?
Is there an age limit on claiming my child as a dependent?
Can I claim a person who is not a relative as a dependent on personal tax return?
Do I have to pay my past due taxes if I cannot afford to, due to job loss, illness, or financial hardship?
Can I open a bank account if I am an undocumented immigrant with an ITIN?
Do I have to report who gave me the cash income on a weekly basis on my tax return?

 

Am I required to file a tax return if I am applying for citizenship?

Applying for naturalization, you are required to file taxes for the last 5 years, or 3 years if you are married to a US citizen.


If I receive cash as income or receive a 1099, am I required to pay estimated tax payments?

Yes, Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more in taxes when their return is filed. Corporations generally have to make estimated tax payments if they expect to owe $500 or more in taxes when their return is filed. It’s recommended that individuals pay state and local taxes estimated by the IRS.


Can I use my personal checking account to pay for business expenses?

If you are self-employed, small-business owner, or a corporation it is highly recommended to have a separate business account. Separate bank accounts make it easier to track expenses for tax filing purposes and supports expenses claimed on the tax return, in the event you are audited.


I retired last year, and began receiving social security payment. Do I have to pay taxes on my social security benefits?

Social security may be taxable. The tax liability depends on the total amount of your income and benefits for the taxable year.


Is there an age limit on claiming my child as a dependent?

To claim your child as your dependent, your child must meet the qualifying child test or the qualifying relative test.

  • To meet the qualifying child test, your child must be younger than you, and as of the end of the calendar year, either be younger than 19 years old, be a student and younger than 24 years old, or any age if permanently and totally disabled.
  • There is no age limit on claiming your child as a dependent if the child meets the qualifying relative test.

Can I claim a person who is not a relative as a dependent on personal tax return?

Yes, as a member of the household. The person must meet the test for qualification:

  • The person must have a social security number or tax identification number
  • The person must live with you all year as a member of your household
  • The person's gross income for the year must be less than $4,000.
  • You must provide more than half of the person's total support for the year.

Do I have to pay my past due taxes if I cannot afford to, due to job loss, illness, or financial hardship?

An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability, or doing so creates a financial hardship.


Can I open a bank account if I am an undocumented immigrant with an ITIN?

Yes, some banks will allow you to open a bank account with an ITIN.


Do I have to report who gave me the cash income on a weekly basis on my tax return?

No, the IRS does not require you to provide the source of your cash income.