Q&A

Where’s my refund?

You can check on your federal refund by clicking on the “Where is my refund?” link at www.irs.gov. To check the status of your Illinois refund, visit My Tax Illinois.

How long do I need to keep my tax documents?

You should keep your tax returns for at least 7 years, if not forever.  If you ever used part of your home for an office, you will want to keep information pertaining to your home such as original purchase price, closing costs to buy, refinance, and sell, and cost of improvements until such time as you sell it.  Likewise, keep records on investments for as long as you hold the investment.  However, once you receive a year-end statement, you can throw away the previous 11 monthly statements.  Keep all other records such as bills, bank statements, etc. for 7 years.  We keep copies of our clients’ returns for 10 years.

I just received a email from the IRS. Should I provide them information or open the email?

Definitely not!  It is a scam.  The IRS NEVER communicates with taxpayers via email.  Delete that email.

Is money I receive as a gift taxable?

Gifts are not taxable to the recipient, but instead are subject to tax to the giver.  Moreover, a taxpayer can give away as much as they want.  Yet once they have given over $1,000,000 in “taxable gifts” during their lifetime, they have to start paying a gift tax.  However, the IRS currently allows a taxpayer to exclude up to $14,000 per person each tax year before it is considered a “taxable gift” and they are required to file a gift tax return.  Therefore, a taxpayer could give away $104,000 to 4 children and their spouses (8 people x $13,000 each) in one year – $208,000 within 2 days if they give away $104,000 on December 31st and $104,000 on January 1st without having to file a gift tax return.

If my dependent child had a part-time job last year, should I claim them on my return?

It is perfectly allowable for your dependent child who worked a job to file a tax return to get their refund but not claim their personal exemption AND for you to claim a dependent exemption for that child on your tax return.  Nearly always it is more advantageous for the parent to claim the dependent exemption for the child on their return, because the parents are nearly always in a higher tax bracket than the child.  IF YOU DO THIS, MAKE SURE YOUR CHILD CHECKS THE BOX ON THEIR TAX RETURN (FORM 1040EZ) THAT SAYS, “IF SOMEONE CAN CLAIM YOU AS A DEPENDENT, CHECK THE APPLICABLE BOX…”  IF YOU DON’T, YOU COULD HAVE TO AMEND BOTH YOUR RETURN AND THEIRS, WHICH COULD DELAY YOUR REFUND BY UP TO 6 MONTHS.

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