SHOULD DEPENDENTS FILE THEIR OWN TAX RETURNS?

A working teenager or college student who is a dependent on their parents' tax return may not need to file a tax return of their own if income from their job was less than $6,350 for 2017. However, if federal income taxes were withheld from their paychecks, they should file a tax return to get that money refunded.

Note that dependents are not allowed to claim an exemption on their own tax return because the parents are entitled to claim the exemption for their dependents on the parents' tax return. In addition, the dependent's standard deduction is limited to the earned income for the year plus $350, but not to exceed the regular standard deduction of $6350.

Can taxes be discharged in bankruptcy?

It is possible to discharge certain tax debts in bankruptcy, provided that certain requirements are met:

● The taxes must be income taxes. Other types of taxes, such as payroll taxes, cannot be discharged.

● More than three years must have elapsed since the tax return generating the liability was due. In other words, the tax return must have been originally due at least three years before the taxpayer filed for bankruptcy.

● The tax returns must have been filed more than two years earlier than the bankruptcy petition. So, even if the tax return was filed late, the tax can still be discharged as long as the tax return was filed at least two years before filing the bankruptcy.

● More than 240 days have elapsed since the tax was assessed. The assessment date is typically on or near the date the income tax return was filed.

● The taxpayer did not commit fraud. A taxpayer who willfully attempts to evade paying taxes will not receive a discharge. This means an intentional, deliberate attempt to evade taxes (not an honest mistake).

● The IRS did not file a substitute return. If you did not file a tax return on time and the IRS filed a substitute tax return on your behalf, the taxes will not be discharged, even if you file a tax return later. The penalties and interest will be discharged provided that the other requirements above are met, but the tax debt will remain.

Fake charities make 2018 ‘Dirty Dozen’ list

The Internal Revenue Service warned taxpayers against scam groups masquerading as charitable organizations, luring people to make donations to groups or causes that don't actually qualify for a tax deduction.

These ‘fake’ charities attempt to attract donations from unsuspecting contributors, using a charitable reason and a tax deduction as bait for taxpayers.

Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of respected, legitimate organizations.

IRS.gov has a search feature, Exempt Organizations Select Check (https://www.irs.gov/charities-non-profits/exempt-organizations-select-check), that allows people to find legitimate, qualified charities to which donations may be tax-deductible.

Legitimate charities will provide their Employer Identification Number (EIN), if requested, which can be used to verify their legitimacy through the IRS Select Check.

Don’t give out personal financial information, such as Social Security numbers or passwords, to anyone who solicits a contribution. Scam artists may use this information to steal identities and money from victims.

Be cautious when disclosing credit card numbers to those seeking a donation. Confirm that those soliciting a donation are calling from a legitimate charity.

Don’t give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the donation.