Tag Archives: IRS Tax Tips

An overview of the credit for other dependents

Taxpayers with dependents who don’t qualify for the child tax credit may be able to claim the credit for other dependents. This is a non-refundable credit. It can reduce or, in some cases, eliminate a tax bill but, the IRS cannot refund the taxpayer any portion of the credit that may be left over.

Here’s more information to help taxpayers determine if they’re eligible to claim it on their 2021 tax return.

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The maximum credit amount is $500 for each dependent who meets certain conditions. These include:

  • Dependents who are age 17 or older.
  • Dependents who have individual taxpayer identification numbers.
  • Dependent parents or other qualifying relatives supported by the taxpayer.
  • Dependents living with the taxpayer who aren’t related to the taxpayer.

The credit begins to phase out when the taxpayer’s income is more than $200,000. This phaseout begins for married couples filing a joint tax return at $400,000.

A taxpayer can claim this credit if:

  • They claim the person as a dependent on the taxpayer’s return.
  • They cannot use the dependent to claim the child tax credit or additional child tax credit.
  • The dependent is a U.S. citizen, national or resident alien.

Taxpayers can claim the credit for other dependents in addition to the child and dependent care credit and the earned income credit. They can use the IRS Interactive Tax Assistant, Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents?, to help determine if they are eligible to claim the credit.

More information:
Publication 501, Dependents, Standard Deduction and Filing Information

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Common tax return mistakes that can cost taxpayers

Tax laws are complicated but the most common tax return errors are surprising simple. Many mistakes can be avoided by filing electronically. Tax software does the math, flags common errors and prompts taxpayers for missing information. It can also help taxpayers claim valuable credits and deductions.

Using a reputable tax preparer – including certified public accountants, enrolled agents or other knowledgeable tax professionals – can also help avoid errors.

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Tax professionals should review data safeguards

With the tax filing season around the corner, the IRS and its Security Summit partners remind tax pros to review their security measures. The Taxes-Security-Together Checklist can help tax professionals identify the basic steps they should take to safeguard their clients and their business.

Here’s an overview of some of those safety measures.

Use multi-factor authentication to protect tax accounts
Practitioners can download to their mobile phones readily available authentication apps offered through Google Play or the Apple Store. These apps will generate a security code. Codes may also go to a preparer’s email or text, but the IRS notes those are not as secure as the authentication apps. Tax professionals can search for “authentication apps” in a search engine to learn more. Continue reading

More Ida relief from IRS: Sept. 15, Oct. 15 deadlines, other dates extended to Jan. 3 for parts of Connecticut

Victims of Hurricane Ida in parts of Connecticut now have until Jan. 3, 2022, to file various individual and business tax returns and make tax payments, the Internal Revenue Service announced on November 3, 2021.

Following the Oct. 30 disaster declaration by the Federal Emergency Management Agency (FEMA), the IRS is offering this relief to those parts of the state designated for either individual or public assistance. Currently, this includes Fairfield and New London counties, including the Mashantucket Pequot Tribal Nation and the Mohegan Tribal Nation. Any jurisdiction added to the FEMA declaration will automatically receive the IRS relief. The current list of eligible localities is always available on the disaster relief page on IRS.gov. Continue reading

Renewed tax credit can help employers hire workers; key certification requirement applies

IRS in there latest release (Issue Number:IR-2021-184) covers about the tax credit help for employers. 

WASHINGTON – With many businesses facing a tight job market, the Internal Revenue Service reminds employers to check out a valuable tax credit available to them for hiring long-term unemployment recipients and other groups of workers facing significant barriers to employment.

During National Small Business Week, the IRS is highlighting tax benefits and resources designed to help new and existing small businesses. For any business now hiring, the Work Opportunity Tax Credit (WOTC) may help.

Tax2290 eFile with 2020

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IRS has refunds totaling $1.3 billion for people who have not filed a 2017 federal income tax return

WASHINGTON – Unclaimed income tax refunds worth more than $1.3 billion await an estimated 1.3 million taxpayers who did not file a 2017 Form 1040 federal income tax return, according to the Internal Revenue Service.

“The IRS wants to help taxpayers who are due refunds but haven’t filed their 2017 tax returns yet,” said IRS Commissioner Chuck Rettig. “Time is quickly running out for these taxpayers. There’s only a three-year window to claim these refunds, and the window closes on May 17. We want to help people get these refunds, but they will need to quickly file a 2017 tax return.”

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Business owners should visit IRS.gov for help with tax actions when closing a business

Closing a business is always a difficult decision regardless of the circumstances. With this in mind, the IRS redesigned the closing a business page of IRS.gov to help business owners navigate the federal tax steps when closing a business.

Small businesses and self-employed taxpayers will find a variety of information on the page including:

  • What forms to file
  • How to report revenue received in the final year of business
  • How to report expenses incurred before closure
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Economic impact payments: What you need to know Check IRS.gov for the latest information: No action needed by most people at this time

IR-2020-61, March 30, 2020

WASHINGTON – The Treasury Department and the Internal Revenue Service today announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, some seniors and others who typically do not file returns will need to submit a simple tax return to receive the stimulus payment.

Who is eligible for the economic impact payment?
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.

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Taxpayers should be ready to verify their identity when calling the IRS

Taxpayers and tax professionals who call the IRS will be asked to verify their identities.. Being prepared before a call or visit can save taxpayers time by avoiding having to make multiple calls.

Before calling, taxpayers and tax professionals should instead consider using IRS.gov to access resources like the IRS Service Guide to get faster answers to their tax questions.

If a taxpayer decides to call, they should know that IRS phone assistors take great care to only discuss personal information with the taxpayer or someone the taxpayer authorizes to speak on their behalf. To make sure that taxpayers do not have to call back, the IRS reminds taxpayers to have the following information ready: Continue reading

IRS offers online webinars on tax reform basics for businesses

Members of the small business community can now view webinars on some tax reform provisions that affect businesses. The webinars include:


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