Selected Tax Questions From This Evening
UPDATED: 6:19 AM CDT

KALAMAZOO, Mich. (NEWSCHANNEL 3) - Below are just a few of the dozens of questions our tax experts fielded tonight.

Thank you for all of the questions and participation, and hopefully we were able to answer any questions you may have had regarding your taxes as we inch closer to tax day.

The video attached here represents the 6 questions we had time to answer on-air.

==================

Q: My daughter was divorced in July 2011. In 2010 she filed a joint return with itemized deductions, with her then husband.  They received a refund on their state return which makes it taxable in 2011.How do they claim it ?  1/2 each? or does one of them claim it all.  They split the refund.

A: The State expects them to both claim 1/2, especially if that is what occured with the actual funds. 






Q: EIC ?Joint return, ages 76 &78.Adjusted Gross Income $11,006/Are we eligible?  No qualifying children.

A: Only if the income is earned income from wages.  If it is Social Sercurity you would not be eligible. 






Q: Is there any way to get out of paying taxes on money I drew out of my IRA because of misinformation I was given by a tax expert. I don't think it's fair that I have tried my best to save this money and keep from paying the high taxes on it until I was older. I had called him just prior to drawing out some money to make sure I was in my limits and was given wrong information which is about to cost me about $3,200.

A: If you took a distribution it is taxable unless you qualify for one of the hardship provisions.  If you are subject to penalties for early distributions I would try to get some support from the financial planner that they provided poor advise.  You may then be able to get the IRS to waive the penalties but it would be a longshot. 






Q: We filed joint return.  We are both drawing social security.  I do not make over the allowed income for social security.  Would  we have been better off to file "married filing separately?  My husband made over the allowed amount.

A: If you are married and living together the taxable social security limits are significantly reduced resulting in the more taxability of the social security.  You should file jointly. 






Q: Do I have to file state or federal taxes if my sole source of income was through disability income. I am 100% through the VA. I also own a house and pay taxes. Should I file state taxes because of that since I never paid any state taxes during the year just property taxes.

A: You would not be required to file but if you are paying property taxes on your home you may qualify for the property tax credit on the Michigan return.  As a general test your taxes must exceed the total of all your income (taxable and non taxable) time 3.5%. 






Q: Do you have to declare interest earnings from IRA's and 401K accounts?

A: Income on your IRA's and 401(k) are not taxable until it is distributed from the account in the form of a distribution. 






Q: If you contribute to a non-Michigan 529, I know that you aren't able to deduct from federal taxes, but can you deduct it from your Michigan tax return?  Also, how many years can you go back if you find you needed to make adjustments on previous tax returns?

A: A non-Michigan 529 plan is not deductable on either Federal or the Michigan return. 






Q: My son is 24 and completing his last year in college. Can we still claim him?
Also, he has not worked in MI the last tax year but MI  is is permanent address. He has worked in St. Louis for that year. Does he need to file taxes in both places even tho he hasn't worked in MI nor has lived here in the past year.

A: You can still claim you son this year as long as he was a full-time student for 5 months during the year.  He will need to file in both state.  In St. Louis as a non resident and in Michigan as a resident.  He will receive a credit for the tax paid to St. Louis on the Michigan return. 






Q: I am a 78 year old single woman who hasn't filed tax since the year we rec'd the $300 payment.My only income is SS (!004 per mo) and a small interest of $652 per year.  Is there anyadvantage to me to file?  I was thinking of the home heating benefit or maybe something else that I don't know about.

A: You would benefit from filing with Michigan as you may qualify for the home heating credit or the property tax (rent) credit.  I would suggest contacting your local library and seeing if they provide a service for low income inviduals were you may receive free tax service for filing those forms. 






Q: I have a dog grooming business where my son who is twenty-four helps out.  He doesn't have a set schedule.  I pay him 40% of the groom when he does help out.  My question is how much does one have to earn before they need to claim it.  He is a stay at home dad right now so this is the only income he brings in.  Second question: Do I have to make him a employee W-2's etc or can I claim him as a contract employee and issue him a 1099?

A: If you pay someone over $600 you need to issue a 1099 to them.  The IRS has a checklist they use to determine if someone is an employee but if he sets his own time and it is based upon the income generated not hours work he sounds like an independent contrator. 






Q: I owe taxes from last year...when I do my taxes will they just ad to my last year taxes?

A: Yes any refunds will be applied to the prior year taxes owed first and then any excess refunded.  With a blaance owed you will need to contact the IRS to have them conbine the new balance with the old. 






Q: Does my 87 year old father need to file? Some of his friends don't, and say he shouldn't either. He gets a small pension and SS. 

A: If he is single and over 65 he does not need to file unless his pension income exceeds $10,950.  He may want to file for Michigan if he is eligable for a property tax credit or a home heating credit as they are refundable credits.






Q: For 2011, my only source of income was social security. My net benefits was $4,164. Should and can I file?

A: You are not required to file federal or State of Michigan taxes but you may qualify for some refundable credits on Michigan for property taxes or the home heating credit.





Q: If I won 13,000 at a Casino but lost 32,000 how much can I claim as losses?

A: Gambling losses are limited to the amount of gambling winning and claimed on Schedule A.    However if you are a professional gamler you are allowed to deduct losses in excess of winnings on Schedule C but you have to have a profit miotive and make money 3 out of 5 years or the IRS can determine it is a hobby and the losses are limited. 






Q: Can I claim the interest on my motor home if I live in it two months during the winter in a different state?

A: You can mortgage claim interest on your home and a second residence.  The motor home can qualify as a second home and is deductable. 






Q: How do you know what deductions are out there? Is there a list out there somewhere that an average person can find. I claimed my child as a dependant on my taxes, what do they put on their 1040ez when filling.

A: The IRS has some information available on there website at IRS.gov and also you can look at the instructions for Schedule A on the wed site where many of the deductions are claimed.  Your daughter does not claim herself on her tax return if you have claimed her. 






Q: My mother passed away in November.  She received Social Security and a very small pension from my dad who is also deceased.  She had one primary residence and had two rental properties that have been vacant and have not had any income  all three properties are paid in full.  Would I need to file taxes for her estate??

A: If she had income of more than $100 after her death, you would need to file an estate tax return. 






Q: My Wife is on oxygen 24 hours a day. the electric company only give you $4.50 credit a month and they say that these machine will use around 600 units a month for electric. My question is can i deduct the cost energy that this machine use on my medical expense, also when it is real hot i have to run the air condition in the summer so she can breath easier which use electric can this be deducted.

A:  I find nothing to substaniate the ability to deduct the energy costs.  You would need to be able to substaniate the costs for the medical expenses seperate from the normal expenses and the benefit received by others which would be difficult.