Frequently Asked Questions
We’ve compiled a list of some of the most commonly asked questions
the team at Schell & Hogan, LLP receives throughout
the year. If you have questions about your personal or business
taxes, contact the professionals of Schell & Hogan, LLP.
What is the latest date I can file my individual tax returns?
Most people have until April 15 to file a tax return for the previous year. However, tax extensions, estimated payments and certain money-saving moves can add other deadlines to your calendar. Tax Day for the 2020 tax year is May 17, 2021. With an extension, the deadline to file your tax return for the 2020 tax year is Oct. 15, 2021. Consult the tax professionals at Schell & Hogan, LLP to discuss your options in more detail.
What are the limitations to claim a child as a dependent?
To claim your child as your dependent, your child must meet either the qualifying child test or the qualifying relative test. For the qualifying child test, your child must be younger than you and either younger than 19 years old or be a "student" younger than 24 years old as of the end of the calendar year. There's no age limit if your child is "permanently and totally disabled" or meets the qualifying relative test. A child dependent must also qualify for the dependent taxpayer test, citizen or resident test, and joint return test.
How can I maximize my deductions?
As a client of Schell & Hogan, LLP, our tax professionals can assess your specific situation to determine the best route to take when it comes to reducing your taxable income. Some clients set themselves up for the standard deduction, while others itemize deductions.
There are several types of deductible non-business taxes: state and local income taxes, or general sales taxes; real estate taxes; and personal property taxes. The IRS allows cumulative deductions of up to $10,000 for the above taxes in a given year. Other deductions to itemize may include retirement contributions, medical expenses, and charitable donations.
When should I expect my refund?
If taxes are filed electronically, the IRS issues most refunds in less than 21 calendar days. If you are planning to use your refund for a time-sensitive purchase, keep in mind that it may take more than 21 days to fully process the refund from the IRS through your financial institution or receive a refund check by mail. Additionally, some returns take longer to process due to errors, fraud concerns and additional review time, among other factors.
I requested a direct deposit refund but have received a paper check in the mail. What does this mean?
There are three possible reasons for this:
- The IRS can only deposit refunds electronically into accounts in the name of the taxpayer, in the name of the taxpayer’s spouse, or a joint account.
- Financial institutions retain the right to reject a direct deposit.
- The IRS cannot deposit more than three electronic refunds into a single financial account.
Once my taxes are filed, what information should I retain?
Generally, Schell & Hogan, LLP recommends retaining all receipts and any other records that you may have of your income and expenses in case you are audited. Expenses should be categorized by Income, Exemptions, Medical Expenses, Taxes, Business Expenses, Education, Travel, and Auto. While the IRS recommends keeping tax returns for at least three years, the IRS has different documentation retention recommendations for individuals and for small businesses which may extend past the three-year threshold. Business owners should strongly consider the bookkeeping, accounting and tax services of Schell & Hogan, LLP to create a streamlined process for your business.
When should I file my business taxes?
The form of business you operate determines what taxes you must pay, how you pay them and when you pay them. All businesses except partnerships must file an annual income tax return. Partnerships file an information return. The form you use depends on how your business is organized. Refer to the IRS Business Structures webpage to find out which returns you must file based on the business entity established.
Are there different dates for C-Corporations and S-Corporations?
If you are taxed as a C-Corp, you need to file a Form 1120 by the 15th day of the fourth month following the close of the tax year, which for most taxpayers is April 15. If you are taxed as an S-Corp, you need to file a Form 1120S by the 15th day of the third month following the close of the tax year, which for most taxpayers is March 15. You cannot send this form to the IRS with your personal income tax return.
Who must file a Georgia income tax return?
Every corporation, partnership, and LLC that does business or owns property in Georgia or receives income from Georgia sources must file a Georgia income tax return. Additionally, every partnership or LLC being treated as a partnership, which has partners or members who are domiciled in Georgia, must file a Georgia income tax return.
Being self-employed, what sort of deductions can I take?
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.
Should I pay quarterly estimated taxes?
If you’re self-employed, not enough tax is taken out of your salary or pension, or you have other earnings such as alimony, interest, or dividends, you may need to pay quarterly estimated taxes. Check out the IRS site here to learn how to calculate your estimated taxes, when they’re due, and the penalty for underpaying.