As the April 15 tax deadline approaches, I have fielded a wide range of tax questions from filers this season. Some questions show up every year - like "Do I even need to file my taxes?" and "Who can I claim as a dependent?" - but several new topics such as the Affordable Care Act are on taxpayers' minds this year.
So what are the most common tax questions from taxpayers? Here is a look at this season's top five most frequently asked tax questions and answers:
1. Do I need to report my healthcare coverage on my taxes?
Yes. For the first time, taxpayers are required to report their health care status when they file their taxes. For 9 out of 10 taxpayers who already have health insurance and use tax software like TurboTax to file, reporting is as simple as checking a box.
For those who purchased a healthcare plan in the Health Insurance Marketplace, you will see a new tax form called a Form 1095-A. This form will have details of your insurance like date of coverage, premiums, and the amount of your advanced premium tax credit if you received one to help you pay for health insurance.
Those who were uninsured in 2014 may be required to pay a penalty of $95 or up to 1 percent of their income, whichever is greater.
2. What is the Earned Income Credit and how is the amount determined?
The Earned Income Credit is a refundable tax credit given to taxpayers who earn low-to-moderate income from a job or from being self-employed. Income and the number of qualifying children will determine the actual amount of the credit. For tax year 2014, the maximum credit can be as much as $6,143 for someone with three or more qualifying children.
The IRS estimates that nearly six million taxpayers who are eligible for the Earned Income Credit don't claim it - that's one in five taxpayers! Many don't claim it because they don't know they qualify or they have income that falls below the IRS threshold for filing taxes, and you must file to receive the credit.
3. Who can I claim as a dependent?
If you're supporting someone who lives with you, you may be able to claim him or her as a dependent. Beyond the home, if you provide more than half of the support for a family member, they may also count as a dependent. This ranges from nieces and nephews to stepparents and even in-laws. For every dependent you have, you can claim a dependent exemption on your federal income tax return worth $3,950 when you file your 2014 taxes this year.
4. I didn't make much money last year - do I still need to file my taxes?
Americans should file a 2014 federal income tax return even if their total income is below the IRS filing requirement ($10,150 for individuals or $20,300 for married filing jointly under age 65). You need to file the return to get a refund on any withheld federal income tax, especially if you're eligible for refundable tax credits like the earned income credit. Every year, money is left on the table because people don't think they need to file. The average unclaimed tax refund is close to $600, and it's important to know that the IRS places a three-year window on claiming these past refunds.
In addition, those who earn less than the IRS filing requirement and may be exempt from purchasing health insurance and the tax penalty under ACA, will still have to file their taxes if they did purchase health insurance in the Health Insurance Marketplace and received an advanced premium tax credit since your actual premium tax credit gets reported on your taxes.
5. When will I get my refund?
Like last year, the IRS expects to issue 9 out of 10 tax refunds within 21 days for those who e-filed with direct deposit. E-file with direct deposit is the fastest way to get your tax refund. For paper-filers, the process does take more time. Once you have e-filed your tax return, here are a few ways to check the status of your refund.