Frequently Asked Questions

Q:   My marital status changed during the year.  Can I choose which filing status I want

to claim on my income tax return?

A: For tax return purposes, your filing status (married, single, head of household) is determined by

your situation on December 31.

Q:  My employee is going to be doing odd jobs for me outside of his/her normal job.  Can

I pay him/her as contract labor for the odd jobs?

A:  In most cases, no.  If the employee has a business in which they do the same odd jobs for others,

the work is completely unrelated to the work performed for you as an employee, and they claim this

business income on their tax return, it may be considered contract labor.

Q:  Can I file Head of Household?

A:  Head of Household is an unmarried man or woman who has dependents and provides over half

of the costs of keeping a home.  The home has to be the principal residence (for more than half the

year) of the taxpayer's child or qualifying relative who is the taxpayer's dependent.  Married people

are not considered Head of Household even if they are the only wage earner.

Q:  Can I claim my 20 year old son as a dependent?

A:  You can claim children up to age 24 if they are a full time student (or any age if they are

permanently disabled), if they did not provide more than half of their own support and lived with you

more than half of the year.  There are special rules for divorced parents.

Q:  Is my social security taxable?

A: To determine taxable social security, subtract the base amount from adjusted gross income, tax

exempt interest, and one half of social security benefits, then divide by two.  Taxable social security

is the lesser of that number, or one half of social security.  Base amounts for 2009 were:

Joint Filers:  $32,000

Married Filing Separate (separated part of the year):  $0

Married Filing Separate (separated the entire year), Single, or Head of Household:  $25,000

Q:  What is the capital gains rule?

A:  Gains from the sale of capital assets are taxed at lower rates.  Capital assets are any property except

inventory and/or the property sold or used in the ordinary course of a trade or business.  For 2010, the

rates are 0%, 15%, 25%, and 28%.

Q:  I received a 1099.  What should I do with it?

A:  There are many types of forms 1099, but they are all used to report income to the Internal Revenue

Service.  This income should be claimed on your income tax return.  If you receive a 1099 that should

have gone to someone else, or that is incorrect, you should contact the company that issued the 1099

and have them correct it.  Do not ignore it, because the IRS will assume it is income you failed to report

on your return.