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Why can’t I get all the child tax credit in my refund?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro You may remember during the pandemic getting a massive $3,000 to $3,600 per child refundable child tax credit that was paid throughout the year – that was nice, wasn’t it? However, now you may be wondering why you never see anywhere near the $2,000 per child tax credit in…
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What if my mortgage was refinanced or sold to another lender, and I have two 1098 forms for the same mortgage?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro The FreeTaxUSA software is limiting your mortgage interest deduction because the two 1098 forms you’ve entered show combined balances over $750,000. This doesn’t seem right! How can you claim the maximum deduction? Don’t worry; we’re here to help. Let’s start by looking at…
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What is an SEP plan and how do I calculate my limits and enter it in FreeTaxUSA?
Contributed by: CoryF, FreeTaxUSA Agent, Tax Pro Please consult a financial institution for set-up instructions for your business SEP. They can provide a detailed discussion on this complex subject. Simplified Employee Pension explanation What options are available to save for my retirement when I am self-employed? The…
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Backdoor Roth Plus a Recharacterization – Basic Scenario (2024 and later)
Contributed by: RachelR, FreeTaxUSA Agent, Tax Pro and Henry, FreeTaxUSA Agent, Tax Pro This article applies to 2024 and later years Here are the steps for entering a backdoor Roth including a recharacterization. First: Add the 1099-R for the Roth to traditional recharacterization When your recharacterization from…
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Backdoor Roth Plus a Recharacterization – Recharacterization Happens After December 31st (2024 and later)
Contributed by: RachelR, FreeTaxUSA Agent, Tax Pro and Henry, FreeTaxUSA Agent, Tax Pro This article applies to 2024 and later years Sometimes you don’t complete the recharacterization until the tax year is already over. Here’s an example: You made a Roth IRA contribution for 2024 during the 2024 tax year. You don’t…
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Reporting a Backdoor Roth – Conversion After December 31st (2024 and later)
Contributed by: RachelR, FreeTaxUSA Agent, Tax Pro and Henry, FreeTaxUSA Agent, Tax Pro This article applies to 2024 and later. The basic example assumed both the traditional IRA contribution and the Roth conversion step happened in the same year (for example, both events happened during 2024, for the 2024 tax year).…
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Reporting a Backdoor Roth – Basic Scenario (2024 and later)
Contributed by: RachelR, FreeTaxUSA Agent, Tax Pro and Henry, FreeTaxUSA Agent, Tax Pro This article applies to 2024 and later. The basic reporting of a backdoor Roth involves the following scenario: You contribute to a traditional IRA before the end of the tax year (December 31st). You either: Have too much income for the…
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Can I deduct the sales tax paid on a large purchase?
Contributed by: WrenD, FreeTaxUSA Agent, Tax Pro Big purchases like cars, boats, or RVs can be super exciting, but did you know they might also come with some cool tax benefits? Imagine turning that big buy into a smart money move by deducting the state sales tax on your federal tax return. This article will show you how…
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How do you allocate premiums on Form 1095-A if you have a policy shared by a parent and a non-dependent child?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro The Health Insurance Marketplace allows parents to include a non-dependent child under age 26 in their household. This means the child can be added to the parent’s policy even if they aren’t claimed as a dependent on the tax return. In this situation, Form 1095-A must be…
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What to do if I never filled out Form 8606 for past nondeductible IRA contributions
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro and KristineS, FreeTaxUSA Agent, Tax Pro After-tax (nondeductible) contributions to your traditional IRAs are tracked and reported on Form 8606. These contributions give you basis in your IRAs. Keeping accurate records of your basis is important because when you take…