Skip to Content
Parents camping with their two children symbolizing that they have a lot of financial planning to prepare for in the future
Planning your financial future

Income tax FAQs

Whether you look forward to tax season (and potentially getting a refund) or you dread the idea of preparing your return, it's a task that can't be avoided.

If you're not a tax expert, you'll most likely have questions, especially since the tax code can change from year to year. To make your tax filing easier this year, review some of these frequently asked tax questions and answers.

1. What filing status should I choose?

Your filing status can determine your standard deduction and your eligibility to claim certain tax deductions or credits but choosing one isn't always straightforward. If you're married and separated, for example, you may be unsure whether your status should be married filing separately or head of household. Fortunately, the IRS offers a free tool you can use to narrow down which status to file.

2. What income is taxable?

This is a common income tax question among people who have income from sources other than a traditional full-time job. For example, if you're running a side business you may wonder whether that money has to be reported. IRS Publication 525 goes into more detail about what's taxable and what isn't.

3. Should I claim the standard deduction or itemize?

Deductions reduce your taxable income for the year, and there are two ways to claim them on your tax return. Taking the standard deduction allows you to deduct a set amount, based on your age and filing status, while itemizing allows you to deduct individual expenses. Visit the IRS website to stay up to date on standard deduction amounts.

4. Are there any updated deductions I need to know about?

The Tax Cuts and Jobs Act made changes to several deductions, including capping the state and local tax (SALT) deduction at $10,000 and changing the guidelines for deducting mortgage interest. It also eliminated deductions for these expenses altogether:

  • Home equity loan interest paid (excluding loans used exclusively for home improvements)
  • Moving expenses
  • Unreimbursed employee expenses
  • Alimony
  • Unrestricted casualty losses

5. Who can I claim as a dependent?

Claiming dependents on your tax return could save you money if you're able to qualify for certain tax breaks, such as the Child Care Tax Credit or student loan interest deduction. To claim someone as a dependent, they must meet certain IRS guidelines.

Specifically, a dependent must be a qualifying child or a qualifying relative.

6. What happens if I miss the filing deadline?

Not filing your taxes on time can trigger the failure-to-file penalty, which is five percent of your unpaid taxes due each month if you owe. If you don't think you'll be able to file by the April deadline, you can request an extension, which gives you six additional months to prepare your return and file. Interest will accrue on any outstanding taxes owed during this period.

7. What happens if I can't pay what I owe?

If you owe taxes and don't pay them, you can be charged a separate failure-to-pay penalty, which is one half of one percent of your outstanding taxes owed. If you file late and pay late, your maximum penalty is 5 percent per month. If you don't think you'll be able to pay on time, start planning now. Consider how you plan to pay your balance and be sure to explore a payment plan with the IRS.

Want to learn more? Read this tax filing checklist next as you get ready to file.


WEB.1577165.03.20

Arrows linking indicating relationship

Related Articles

Several twenty-something couples laughing and hanging out with girlfriends hugging boyfriends’ necks.

How to manage money in your 20s

Learn more
Worried woman sitting on couch thinking about how her chronic illness will affect her finances.

Creating a financial plan when chronic illness or disability strikes

Learn more
A woman in a dark green shirt leans back in her chair and smiles at work.

What is a hard credit inquiry?

Learn more

All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.