Frequently Asked Questions for Individual Tax Prep
- $12,400 if you file as single or married filing separately
- $18,650 if you file as head of household
- $24,800 if you file as married filing jointly
Because tax reform significantly increased the standard deduction, you may find your itemized deductions do not exceed the standard deduction amount for your filing status. But mostly talk to your tax preparer!
If you had an income of $30,000 and took a $1,000 deduction, you don’t have to pay tax on that $1,000 of income. The deduction could save you $200 (assuming a 20% tax rate on that $1,000).
By contrast, a $1,000 credit would reduce the actual amount of tax you owe by that $1,000. So, if you owed $3,000 in taxes, you’d now owe $2,000 and save $1,000.
8. What are the Tax Implications of Withdrawing Money Early from a Retirement Account to Pay Bills or Debt?
You may have a dependent if …
- You have a qualifying child younger than 19, or under 24 if they’re attending school full time. Your child must either live with you for more than half the year — or qualify for an exception — and must not provide more than half their own support. Your child also can’t file a joint tax return, except to claim a refund.
- You have a qualifying relative. Your qualifying relative either has to share a specific family relationship with you or must live with you all year long. You must provide more than half their support, they must earn very little, and they can’t be claimed as a dependent by anyone else.
The IRS provides an Interactive Tax Assistant Tool to help you determine if you have a dependent.