Answers to basic tax questions that could save you money

From filing as a dependent vs. independent to stimulus checks, here are some of the answers to tax questions you might have.

ByMichael Finney and Randall Yip KGO logo
Tuesday, March 1, 2022
10 basic tax questions answered
From filing as a dependent vs. independent to stimulus checks, here are some of the answers to basic tax questions.

SAN FRANCISCO (KGO) -- All this week, 7 On your Side will be tackling some of the questions and issues you might face preparing your taxes. We kick off Tax Chat week by revealing the answers to 10 basic questions that we hope will make your life a tad easier

Filling out a 1040 form can be both scary and puzzling.

We turned to Kelly Baston and Lindsay Rojas from the United Way Bay Area's Free Tax Help program for some answers.

1. What is a W2 form?

"This is not a form you fill out. You use it to take that information and use it to fill out your tax return," said Baston.

On the form your employer lists how much money you made and what it took out to pay your taxes.

That information will be handy when you fill in the 1040, which every taxpayer needs to file their taxes.

2. How do I know if I should file as a dependent or independent?

"So, a dependent is someone who can be claimed by someone else and who has someone else providing more than 50% of their support, and they made less than $4,300," said Rojas.

Parents are the most likely to declare someone a dependent. That makes them eligible for the child tax credit, worth as much as $3,600 per eligible child.

Undergraduate students who are not supported by their parents may file as independent and claim the American Opportunity Tax Credit for up to $2,500.

Graduate students can claim the Lifelong Learning Credit for up to $2,000.

3. Do full-time students fill out a different tax form?

They do not, however you should get an additional form from your college that could reduce your taxes.

"If they receive a 1098T form from their institution, then they would be able to possibly claim one of the two credits for students," explained Rojas.

4. How much do I have to pay in taxes?

"The IRS does put out a tax table where you can look up your tax liability, but you have to know your taxable income and your filing status," Baston said.

5. How do I know if any money I have made is tax-exempt?

"If you go into the IRS. gov and looking at what those tax exemptions are, that will reduce your liability," said Rojas.

Daycare expenses can be tax-deductible as is the cost of eldercare.

6. Do I have to include any of the stimulus checks in my tax form?

"You do not put that on your tax return as income, but you do need to include the stimulus amount on your return," Baston suggested.

That way if you didn't receive the right amount, the IRS can make up the difference to you. Even better news, the stimulus checks are not taxable.

7. If I haven't worked in the last year, do I still have to file taxes?

"You may want to file even if you did not work, because you could claim the stimulus or there may be tax credits you're missing out on," Baston continued.

8. Do I even make enough money to pay taxes?

Unfortunately, you still could owe money even if you didn't make much. One way to check is to look at your W2 form.

"And if you look at box 2, and there's nothing there or a minimal amount, you know, then there's more likely that you'll be owing some money," Rojas said.

9. "Do I have to fill out my own form, or can I have someone assist me?

"United Way Bay Area has a free tax help program where certified volunteers will help prepare your taxes for free," Baston said.

10. What information and paperwork should I bring in when getting free tax help?

"One of the main things you need to have is your photo ID, your Social Security card or ITIN for yourself and dependents and spouse and then also all the tax forms - the W2 that we talked about earlier," said Rojas.

To find the free tax help near you, call 211. If you have a tax question, we'll be answering them on Friday from 3 p.m. to 7 p.m. Go here to find out how you can submit your question ahead of time for 7 On Your Side and our team of experts.

Take a look at more stories by Michael Finney and 7 On Your Side.

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