Individual Tax

• previous year tax return

• copy of your ID and Social Security Number (preferably have your card at hand)

• Social Security numbers of everyone listed on the tax return. 

• Bank account and routing numbers for direct deposit or information to make a tax payment.

• Forms W-2 from employer(s).

• Forms 1099 from banks, issuing agencies and other payers including unemployment compensation, dividends, distributions from a pension, annuity or retirement plan.

• Form 1099-K, 1099-MISC, W-2 or other income statement for workers in the gig economy.

• Form 1099-INT for interest received.

• Other income documents and records of virtual currency transactions.

• Form 1095-A, Health Insurance Marketplace Statement.

• Letter 6419, 2021 Total Advance Child Tax Credit Payments, to reconcile advance child tax credit payments.

• Letter 6475, Your 2021 Economic Impact Payment, to determine eligibility to claim the recovery rebate credit.

• Information to support claiming other credits or deductions, such as receipts for child or dependent care, college expenses or donations.

• supporting documentation related to medical expenses

• business-related income and expenses (self-employment)

We recommend that you keep these documents together with your tax returns for a minimum of seven (7) years

All US citizens or resident aliens if any of the following applies:

• Income is greater than the standard deduction

• Net Self-employment income is $400.00 or more (for self-employed individuals)

• Foreign Earned Income (the amount is capped by the IRS, click here to check the current maximum amount allowed 

• Inheritance and Gifts received (rent or interest received related to the gift or the inheritance is NOT excluded from income)

• Life Insurance proceeds paid to third party donee beneficiary (exceptions apply)

• Medicare Benefits received under the Social Security Act

• Accident and Health Insurance Benefits from policies purchased by the taxpayer

• Workmen Compensation received

• Injury Awards received

All income not included in the list above, must be reported in your tax return as income

• Health/Medical Savings Accounts proceeds (maximum amount applies) when used for paying qualified medical expenses 

• Alimony paid if the divorce is before the 1st January 2019

• 50% of total self-employment tax paid

• moving expenses (apply only to military forces when moving for work)

• Medical Insurance Premiums paid for a spouse, self, and dependents (for self-employed, limitations apply)

• contributions to Keogh Plan (limitations apply)

• educators expenses up to $250.00 for teachers, and Qualified Tuition expenses for students

• Student loan interest expenses paid (limitations apply)

• Interest forfeited as a penalty for early withdrawal of savings

• Retirement plan contributions (IRA - SPE, SIMPLE, Traditional, Roth)

• Discrimination Suit Costs, up to the award received

• Jury Duty fees remitted to the employer

• Standard of Itemized Deductions

Tax credits reduce the federal income tax that a taxpayer should pay. They are divided into two groups: non-refundable and refundable tax credits. Non-refundable are those credits that can reduce your tax liability only to 0 but never create a refund. The refundable tax credits can reduce your liability below 0 creating a tax refund

• Non-Refundable credits

  • Adoption credit

  • Lifetime Learning credit*

  • Child/Dependent Care credit

  • Elderly/Disabled credit

  • Foreign Tax credit

  • Other Dependents credit

  • Residential Energy credit

  • Retirement Savings Contribution credit

  • Electric Vehicle credit

  • Qualified Bonds credit

• Refundable credits

  • Child Tax credit

  • American Opportunity credit*

  • Advanced Child Tax credit (Covid-19)

  • Earned Income credit

  • Recovery Rebate credit (stimulus checks)

  • Sick/Family Leave credit (for self-employed)

For all these credits some limitations apply. 

*: these credits cannot be claimed for the same student in the same year

W-4 Forms are provided by employers. Your withholding in your payslip will be computed based on the information you provide in Form W-4, such as filing status's standard deduction and tax rates. The information provided will define the amount that will be withheld from your salary, and this will have an impact on your refund at the end of the year.

If you decrease too much your withholding by completing Steps 3 and 4 because you should be eligible for income tax credits (e.g. child tax credit) or other than the basic standard deduction (e.g. itemized deductions, IRA contributions, student loan interest), then you will be paying lower taxes during the year and there is a chance you will have to repay it to the IRS at the end of the year. In this case, you will not have a tax refund but an underpayment. On the other hand, if you increase too much your withholding by completing Steps 2 and 4(a), (c) because you have more than one source of income or because you just want an extra withholding, you should have big withholdings during the year, and possibly a tax refund at year-end. 

Click here to download W-4 Form 

Click here to watch a video about W-4 Form 

1. Single

• you should be unmarried or married but legally separated and have no dependents 

2. Married Filing Jointly

• married and not legally separated or divorced on the last day of the tax year (if living apart)

• both spouses are resident aliens at any time during the year and file a singer return under Form 1040

• If the taxpayer's spouse died during the tax year, the surviving spouse may file a joint return for that year, unless the surviving spouse remarries before the end of the year

3. Married Filing Separately

• it is optional to file separately for married individuals

• each spouse files a separate tax return stating his/her income, deductions, and credits. In community property states, each spouse is allocated 50% of the income, deductions, and credits

4. Qualifying Widow(er)

• For this filing status, the same tax rates apply as for Married Filing Jointly, however, the following conditions must be satisfied:

  • the Widow(er) does not remarry up to two (2) years after the death of the spouse. In case of remarriage, the filing status changed

  • a dependent child (own-child, step-child, adopted-child, grand-child, sibling) lived at the taxpayer's home for the whole year and the taxpayer provides for more than 50% of the costs of maintaining the household

• A Foster child is not considered a dependent child for the considerations above

5. Head of Household

• the taxpayer is unmarried as of the end of the year, or is separated and not living together with his/her partner for the last six (6) months of the year

• that taxpayer is not a Qualifying Widow(er)

• the taxpayer pays more than 50% to maintain, as his/her home, a household that is the principal place of residence for more than half of the year for a qualifying child, relative, or/and parent

  • dependent child: own-child, adopted-child, step-child, foster-child, grandchild, sibling that lives with the taxpayer for more than half-year 

  • dependent parent: NOT required to live with taxpayer, but the taxpayer must provide more than 50% of parent's support/upkeep costs

  • dependent relative: sibling, grandparent, uncle/aunt, nephew/niece, few step-relatives, few in-laws that live with the taxpayer for more than half-year. It does not include cousins, foster parents, or unrelated dependents. 

You can deduct a a business expense as a self-employed if the expense is both ordinary and necessary. 

Ordinary expense is the one that is common and accepted in your trade or business. It means that is related to your business activity (e.g. payments to employees, buying supplies, rent office spaces)

Necessary expense is the one that is helpful and appropriate for your trade or business. It means, an expense not directly related to your business activity but necessary to conduct your business (e.g. professional fees, advertising)

You may:

• invest in state and local bonds which are usually exempt from federal income taxes. These investments generally pay back at a lower interest rate than equivalent commercial bonds

• invest in Treasury bonds, which are exempt from state and local income tax. This is a particularly good investment for those who are in high tax brackets and live in high-income-tax states

• invest in a retirement fund account ff your employer offers the opportunity to contribute to a retirement account and they even match a portion of your savings. It is always advisable to save at least the amount your employer will match because you are getting a 100% gain on your money

• invest in a Keogh, SIMPLE or SEP IRA if you are self-employed

When selling your home, you may be able to exclude up to $250,000 ($500,000 for married filing jointly) of gain from your federal tax return. But....

To be eligible for the exclusion, your home must have been owned by you and used as your main residence for at least two (2) out of the five (5) years prior to its sale. For married filing jointly either of the taxpayers can meet the eligibility requirements.

The exception to the above rule is when you sold your home because of unforeseen circumstances (health issues, change in place of employment, divorce or legal separation, natural or man-made disaster, or involuntary conversion of your home)