About Pasadena Tax

Pasadena Tax is a full-service, tax preparation, CPA firm focusing on small business and personal IRS taxation locally based in Pasadena, Texas. We provide individual tax preparation with the personalization that software packages can’t. We keep up-to-date with the changing tax laws, as well as your changing life events, such as the birth of a child, a new business, new home, or inheritance. As a CPA firm, we adhere to certain ethical standards and codes of professional conduct established by governmental bodies and peer organizations.

We have developed this website to keep you up-to-date with the latest tax law changes and tax planning strategies. Want the latest tax deadlines delivered to your e-mail box? Sign up for our e-mail client newsletter full of valuable tax planning strategies.

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Answers to Common Tax Questions

Whether you’re required to file a tax return will depend on several factors, including your gross income, filing status, age, and whether you’re a dependent on someone else’s federal income tax return. And you may have to file even if you don’t owe any tax.

According to the IRS, income includes money, property or services. Any income is taxable unless the law specifically exempts it, and all taxable income must be reported on your tax return. Some nontaxable income must be reported, too, even though you won’t pay taxes on it.

Tax filers are treated differently based on household status. To inform the IRS of which rules apply to you, you’ll have to choose a filing status. There are five: single, married filing jointly, married filing separately, head of household and qualifying widow(er) with dependent child.

A dependent is a person you’re responsible for supporting. If you can claim a dependent, you can become eligible for certain tax breaks, including the child tax credit. You may also qualify for head-of-household status.

The U.S. has a progressive tax system, so not all your income is necessarily taxed at the same rate. Tax brackets refer to the range of incomes taxed at specific rates, while your marginal tax rate is the highest tax bracket applicable to your income.

Beginning with the 2018 tax year, a single Form 1040 has replaced the previous three versions — Forms 1040, 1040EZ and 1040A.

The simplified 1040 form is half the size of recent forms and uses a “building block” approach to simplify the filing process. Taxpayers with more-complex tax situations may need to submit additional forms (called “schedules”), but all 150 million individual U.S. taxpayers start with the same basic form.

Deductions reduce taxable income. You have a choice between taking a standard deduction or itemizing your deductions. When you itemize, you reduce taxable income by the value of certain expenses deductible under U.S. tax law. For example, if you pay mortgage interest, you can deduct the interest paid — but only if you itemize.

Both tax credits and tax deductions can reduce the amount of tax you must pay. Deductions reduce the amount of income you pay taxes on, which in turn can reduce your tax. Credits are a dollar-for-dollar reduction in the amount of tax you owe.

The deductions and credits you’re eligible to claim vary depending upon your situation. Here are some deductions that you can claim even if you don’t itemize.

  • Contributions to individual retirement arrangements, including IRAs, SEP-IRAs, Simple IRAs and solo 401(k)s (these phase out at higher incomes)
  • 50% of self-employment taxes
  • Student loan interest up to $2,500
  • Tuition and fees for higher education up to $4,000 if you fall within income limits (it’s not yet clear if this deduction will be available for the 2018 tax year)
  • Health savings account contributions made with personal funds

Each year, you’re required to file your federal income tax return for the previous calendar year by Tax Day. Usually, the filing deadline is on or around April 15, though if the 15th falls on a weekend or holiday the deadline can be bumped to the next business day.

You have multiple options to file your return.

  • Mail: The address to mail in your return will depend on the state you live in (the IRS offers a list of addresses)
  • IRS e-file: The e-file system is free if your income is $66,000 or less
  • Free online tax filing: Like with a service such as Credit Karma Tax®
  • DIY: With fee-based tax-preparation software
  • Paid tax professional: If your situation is more complex

According to the IRS, most refunds are issued within 21 days for taxpayers who e-filed and who are having their refund directly deposited. Refunds take up to six weeks if you submitted paper returns. Claiming certain credits or deductions might delay your refund. You can check the status of your refund on the IRS “Where’s My Refund” website.

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