I don’t think anyone would describe filing taxes as fun. On the contrary, filing taxes is a major headache. Between a tax code that takes over 73,000 pages to explain, dozens of receipts to sort through, and a host of different procedures to follow, I think the ‘simple’ act of filing your tax return is one of the most infuriating undertakings that any human being can endure.
That being said, there’s no getting around it. The Panama Papers and the Paradise Papers showed us what happens when you dodge taxes. Plus, there’s hope for a hefty tax return on the other side of the mountain of forms you have to wade through. Since the time is fast approaching to have your 2019 return filed, I thought now was the perfect time to address some commonly overlooked items that you have to account for, but many people overlook.
If You Want the Child Tax Credit, You Need the SSN
If you welcomed a new little bundle of joy into the world this past year, congratulations! I’m sure you’re still trying to figure out this whole parenthood thing while you file your taxes. You have my sympathy.
What you may not have realized is that you can actually get a $2,000 tax credit for your children. If they’re under 17-years-old, live with you for at least six months out of the year, and you claim them as a dependent, you qualify. There’s just one catch – you must file with your child’s social security number. Failure to do so will get you fined or disqualify you from receiving the credit.
You May Be a Household Employer, Even if You Don’t Know It
Have a cleaning lady who comes to your home or a nanny who cares for your child during the day? Guess what – you may be considered a household employer and, you guessed it, you may owe some additional taxes. There are certain criteria that have to be met before you qualify as a household employer so you need to know for sure before you file.
Ignorance of the law doesn’t preclude you from following it. If you owe taxes, even if you were completely in the dark about it, you’ll end up paying one way or the other.
The Healthcare Fine Still Applies This Year
One of the Trump Administration’s most sweeping changes to U.S. tax law was rolling back an Obama-era rule. Since 2010, healthcare has been considered an individual mandate, meaning you either had to have health insurance or pay a tax fine. President Trump repealed this requirement with the Tax Cuts and Jobs Act of 2017. However, it doesn’t take effect until the 2019 tax season.
Verifying Your Health Coverage
Even if you had full health coverage, or didn’t go more than three months without it, you still have to prove it to the IRS. This requires that you file IRS Form 1095 with your return. There are three versions of the form and the version you receive will depend on where your coverage comes from:
- Form 1095-A – Coverage through marketplace plans
- Form 1095-B – Small businesses provided coverage
- Form 1095-C – Coverage through an employer-sponsored plan
You Can Get an Extension on Your Return
If you just can’t find the time to file, or you’re trying to make corrections to a form you received, you can actually request an extension to file your tax return. The process extends your deadline for filing to October 15 of this year.
Bear in mind – being approved for an extension is for filing only. Requesting and being granted an extension will not permit you more time to pay any taxes you already owe.
How to Apply for a Tax Extension
The IRS maintains an online system called IRS Free File. You simply have to submit IRS Form 4868 through the online portal. The form isn’t difficult to complete; the key pieces of info you need include:
- Basic personal and address information
- Your SSN and your spouse’s SSN
- Your estimated tax liability for the year
- Any tax payments you’ve already made
- The balance due after paying
- The amount you’re paying towards your new balance
One critical thing to remember is that simply requesting an extension does not guarantee you’ll receive one. If the IRS denies your extension request, you’ll then have to scramble to get your taxes filed as quickly as possible.
