TurboTax Answers Your Most Common Tax Questions

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Tax season is here and with every tax season comes a lot of great tax questions.

Tax Questions
Tax Questions

Here are some of the most common tax questions from job seekers, parents, baby boomers, and homebuyers this tax season:

1. Job Seekers-With an average unemployment rate of 9.7%, millions of Americans were hunting for a new job in 2011.  If you were one of them, your job search, moving expenses, and home office expenses might be tax deductible.

  • Can I deduct the cost of searching for a job? All those resume copies, employment, outplacement agency fees, career seminars, and even business related travel might be deductible if you were looking for a new job.
  • Are moving expenses for my new job tax deductible?  Moving expenses related to a new job may be tax deductible if you meet the distance and time test.
  • Are unemployment benefits taxable?  Many people are asking if the first $2,400 of unemployment income is tax free, however that tax benefit expired December 31, 2010.
  • I started my own business, can I deduct my home office expenses?  Many entrepreneurs are hesitant to write off the business use of their home, however there are many deductions they can take advantage of and shouldn’t miss out on.

2.  Parents– Being parents can be hard work and costly.  Whether you have new additions to the family, college-bound students or kids in day care, at tax time you might be getting a little extra money back in your pocket.

  • Who qualifies as a dependent?  This is one of our most frequently asked questions today, due to the changing dynamics of relationships.  Many taxpayers are surprised to find out who qualifies as a dependent.
  • What are qualified education expenses?  The U.S. government provides incentives, in the form of education tax credits and deductions, to help decrease the economic impact of pursuing a college education.  If you paid eligible education expenses for you, your spouse, or your dependent, you may qualify for one of these tax benefits.
  • Can I deduct the costs of daycare for my children?  If you paid for child care, dependent care, or even summer camp so you could work, you may be eligible to deduct 20 to 35 percent of qualifying expenses up to $3,000 for one qualifying individual and up to $6,000 for two our more qualifying individual.
  • How do I claim the adoption credit?  If you chose to adopt, you may be eligible to take a Qualified Adoption Tax Credit up to $13,360 for qualified expenses  associated with the adoption.

3.  Baby Boomers – There are 78 million boomers nearing or already enjoying the benefits of retirement, and with these life changes comes common tax questions:

  • Is my social security income taxable? Social Security income is not always taxable, however all of your income sources need to be taken into consideration when figuring out how much of your social security income will be taxed.
  • How do the new reporting requirements for cost basis impact me?  Effective 2011 brokers are now required to include the cost basis of investments sold if they were purchased in 2011 and after.  Since this is a new law, you will still be responsible for the cost basis on previous equity purchases that were sold.
  • What are the tax implications of taking money out of a retirement account to pay bills/debt?  Taking money out of your retirement account to pay off debt may seem like a good idea at the time, but withdrawing from your retirement can be costly.  If you haven’t reached the age of 59-1/2, you not only will pay taxes based on your tax bracket, but also an additional 10% tax.

4. Homebuyers/Homeowners -Whether you were were one of the 302,000 new homeowners in 2011 or long-time homeowners, there may be tax deductions available to help offset some of the financial costs of being a property owner.

  • What can I deduct in a mortgage refinance? If you have taken advantage of lower interest rates and refinanced your home, you may be able to take a tax deduction for the points paid(loan origination fees) to refinance your home loan.
  • What qualified for home energy tax credits in 2011? The Residential Energy Tax Credit was reduced in 2011, however you still may be able to deduct up to $500 for insulation, roofs, and doors.
  • How do I repay the 2008 First-Time Homebuyer Tax Credit?  If you were lucky enough to receive First-Time Homebuyer Tax Credit in 2008, you were supposed to start repaying the tax credit in 2010 over 15 years through your tax return.

Still have more questions?  Don’t worry.  TurboTax guides you step-by-step through entering the appropriate information, makes behind the scenes calculations, and puts your tax information on the appropriate tax forms.  In addition, TurboTax tax experts are available to provide personalized guidance so that you can be confident you are getting the biggest tax refund and that your taxes are done right.

91 responses to “TurboTax Answers Your Most Common Tax Questions”

  1. We have been with TurboTax for several years. Getting things ready to file again. I have lost or miss placed by sign in (password, etc.) What do I need to do?

  2. Ilived in my home for 4 years. It foreclosed do to my furloughs. Do I still pay back the first time home owners $7500?

  3. I’ve entered all information on my Federal Return, and when I get to my state return it asked for “Other Income” and “Gifts Received” again, do I fill it in again? Wouldn’t that income already have been transferred from the FR?

  4. If you have entered “Gifts received” and “Other Income” on your Federal Return, do you have to re-enter them on the state? Isn’t that information transferred from the Federal Return already?

    • Hi Jerry,
      When you enter tax documents in TurboTax, such as W-2s or From 1099’s, an electronic copy is made that TurboTax includes when you efile your tax return with the IRS (and any states). Very few paper forms need to be mailed in these days (speeds things up), but if anything does need to be mailed in, TurboTax should print instructions for you. The IRS matches what you’ve entered into TurboTax with another copy the company issuing your form has sent to the IRS.

  5. I sold my house last year. I was a joint tenant with my sister…i.e. We shared the mortgage, and split the proceeds from the sale. Turbotax asks for the whole amount of the sale, but i really should only put down my share, right? I don’t know how to do this.

  6. I own a property which is homesteaded, with a mobile home. Shortly after it was bought, there was a bad storm, which has caused it to be unliveable. Now I am paying rent. Is there a deduction I can take for this?

  7. If the irs accepted my return on jan 24 n ya saying that they won’t send refund til the 31 or I might get refund faster any idea.

  8. I have a $100K+ business loss since 2007, and have been taking a standard deduction every years since. On Turbo Tax is there a mechanism for taking that deduction?

  9. I filed for an extension for my 2012 taxes and sent in what I thought I would owe….after doing my taxes, I am now due a refund. I see on line 68 you can add what you paid when you filed an extension, but I don’t see how to enter that amount on my TurboTax program….any ideas?
    Thanks

    • Hi Shannon – You can claim as an itemized deduction either your state & local income taxes or your state & local sales taxes. If you choose to deduct sales taxes, then you can include certain major purchases such as cars. The attached link has more information. Cheers… –Christopher http://turbotax.intuit.com/support/go/GEN12386

  10. I live in one state and work in another so taxes were withheld in both states. Is there a special code to enter into turbo tax to combine the state taxes to reflect the correct total?

  11. Why does line #44 on Form 1040 show no tax due when line #43 has $53,203 in taxable income? I’m using TurboTax Premier 2012 (Windows PC).

    • Mark, Im having the same problem. Line 44 shows 0 tax due when tax IS due. Have you gotten any feedback as to the cause of the problem? Thanks, Bill

  12. I filed both state and federal taxes through TurboTax on February 4th. My federal return is in process, but my Illinois says they have not received my state return. Can you explain this, please?

    • Hi Will –
      You will file a final tax return to claim any income and expenses you had for 2012. Make sure to close out (dispose of) any assets you had for the business as well. The software will walk you through all of this, but if you need help…just let us know.
      Thanks,
      Karen

  13. Hi! I did my tax myself using Turbotax. The thing is, my son is applying for financial aid for college and they form asked the question what form did your mom use to file her tax. How do i know what form i use? Was it a 1040, 1040A ? etc

  14. Lisa,
    Has the 2012 turbo tax software been updated so that we can file a 1040-A (itemized deductions) (i.e. the alternative minium tax tables have been adjusted)?
    V/R
    Tim Power

    • Hi S. Pierson –
      Are you asking about ordinary income taxes? There really isn’t an age where you stop…but rather, if you have taxable income. Taxable income can be from wages, investments, self-employment, retirement funds, and other types of income.
      I hope this helps. If not, let us know more details and we can help you out.
      Thanks,
      Karen

  15. I file only property tax and heating tax credit.
    My two Daughters with dissabilities both work.
    I need to know if I claim their ss that they get monthly and also disablity also monthly on my taxes or theirs.
    I am the Payee…they are the beneficiaries.

    • Hi Lanette,
      If the checks are made out to you and you have legal right to receive the benefits then a portion of the benefits needs to be used to see if any of the benefits would be taxable and your children would have to do the same. The benefits may not be taxable at all. It depends on the other income you receive.
      TurboTax ask all the right questions and figures this out for you.

      Thank you,
      Lisa Greene-Lewis

  16. Mag said on April 14, 2012 at 3:01am.
    there is an item on #8 of 1040EZ filing jointly, the question: Making work pay credit…Can I claim this??? I am not working my husband is the only one. I am not recieving any UC Benf. as of last half of 2011? I claimed it once and don’t know what to do…Turbo Tax lets me claim this…Is it wrong?? Please answer me quickly as I want to file tonight, Thank you soo much

    • Hi Margaret,
      The Making Work Pay Credit expired in 2010. It was replaced by the Payroll Tax Holiday, which will not impact your tax return. The Payroll Tax Holiday gave you higher payer checks by reducing the social security taxes that were deducted from your paycheck.

      Thank you,
      Lisa Greene-Lewis

  17. My son is buying into a local business he manages. His paychecks have no taxes taken out so has to pay his own plus the owner is taking a portion out of his check to buy into the business. Can I write off the portion that is taken to go towards buying in?

    • Hi Cindy,
      I think you are talking about your son’s portion. If so, he can deduct this as a start up cost for his business depending how the business is going to be set up. He would need to do a schedule C if they are not setting up an LLC, an S-Corp, or C-Corp. I would suggest using Deluxe or Premier.
      Thank you,
      Lisa Greene-Lewis

  18. I am trying to correct an error on Form 40 line 6 on the Alabama state tax form. It is stating I need to make the line match Schedule E. I am using Turbo Tax 2012 Deluxe. it will not let me change the amount to match schedule E on Form 40 line 6. What do I do?

    • Hi Rojeina,
      During error check you should be able to correct the amount when you get the message you’re getting. If you are still having a problem, please go through the tax program to contact one of our free tax experts so they can walk you through what to do live or call 1.800.4.intuit.
      Thank you,
      Lisa Greene-Lewis

    • Hi,
      Please call 1.800.4.intuit or go through the program by asking a question at the bottom of any screen. You will be directed to FAQs that may help. Click on the contact us button on the bottom right of the page. You will be directed to a tax expert.
      Thank you,
      Lisa Greene-Lewis

  19. is there a phone # to contact, so I can askk some questions, as I’m doing my taxes now?? I’ve done my own taxes..

    • Hi Diana,
      This expense should be deductible as an employee business expense as long as he was not reimbursed for the expenses and the 40.00 covers the business use of the car and not personal use.
      Thank you,
      Lisa Greene-Lewis

  20. Hi Lisa

    I am doing my taxes and a question came up asking if I finished college in 4 years. Why do they ask that and does it get me a tax break if I did finish in 4 years?

    • Hi Jennifer,
      They ask that to determine which education credit or deduction you qualify for and which one is best for you. If you finished your first four years of college you are not eligible for the American Opportunity Credit only either the Lifetime Learning Credit or the Tuition and Fees deduction.
      Thank you,
      Lisa Greene-Lewis

  21. While working on our tax return on Turbo Tax – I indicated that we refinanced our home in 2011. I never came across an area to put the amount for the loan origination fees. I have gone over the form several times. Where is it?
    Thanks so much!
    Karen

  22. I don’t know if I don’t know how to do this, but I don’t see either of my comments. I left one on Feb 26 and the 27, it is now the 13th, I have still not received my return with an efile sent and received on Feb 8… I can’t get thru to the irs can you help me find my refund?

  23. The property tax cmorapison is all but useless due to the complexity of each individual taxing entity. I live in Texas and know first hand that the figure given in this and all other articles on the subject does not give an accurate assessment of the property tax burden. It is based on the median home value which is very low in Texas except for the major metro areas. Unless you plan to be living in a trailer, better be prepared to pay through the (fill in the orifice of choice). Plus, the rate keeps going up and can be legally raised as much as 8% per year until 65, but there is no cap on the assessment. Not to mention the fact that it is so corruptly administered, nobody trusts any part of it.

  24. My wife died on 12-29-2110 and I inherited her IRA. I received a 1099R showing the total and the same amount as taxable income without any taxes taken. I rolled the full amt into another IRA belonging to me with no funds received. How do I show this on the 1040 or A so that I am not taxed on $ not taken from the fund? I have been billed by you and it did not work correctly when I printed my return. Please HELP.

    • Hi Olen,
      This can be done in TurboTax. You may have missed a question that you need to check off. One question missed can impact your tax return. I just ran through your scenario in the product and it works. Go to the Wages and Income section of the return, choose explore on my own, you will come to the 2011 Income Summary, scroll down to 1099-R and update the info or start over. Code 4 for death is should be on your 1099-R. After you put in the 1099-R info and hit continue, you will come to “Did you Inherit This IRA?”, Mark “Yes”, “This was inherited from, mark “spouse” click continue, You will come to “Transferred the Funds?” screen, mark “you put the money in your own account in 2011, click continue.
      It will show as a rollover and 0 dollars on line 15b
      Thank you,
      Lisa Greene-Lewis

    • Hi Maher,
      If your new car is a hybrid or other energy efficient vehicle you may receive a tax credit. You may also deduct the sales tax paid on the purchase if you itemize and the sales tax is higher than the state tax deducted from your income. In addition, if you used the car for a business you can take a deduction based on your business use. TurboTax will walk you through all of the entries.
      Thank you,
      Lisa Greene-Lewis

  25. My gross income on the W2 does not include health insurance expense, which is listed as CAF in another section.
    Which number do I use as gross when reporting?

    • Hi Chris,
      You should use the amount in box 1 of your W-2. Your W-2 box 1 gross amount should not include your health insurance if you have a plan where you pay for health insurance tax deferred(not taxable).
      Thank you,
      Lisa Greene-Lewis

    • Hi Larry,
      You are allowed to deduct a capital loss of 3,000 per year. The balance will be carried over.
      Thank you,
      Lisa Greene-Lewis

  26. Ok, so everyone else gets an answer right away but me I guess!? That’s nice! Here I’ve been waiting for 3 days and can’t get an answer, but someone comes on and gets one on the same day! My comment is still awaiting moderation. I’ve been waiting for an answer before I buy turbo tax, so I don’t waist the money on it if I feel I can’t do them correctly!

    I just need to know who claims my sons college expenses, us or him. And what exactly can be claimed? He still a dependent, so not sure how to do this with him leaving in a dorm.

    • Hi Lisa,
      I apologize for the delay. If your son is still a dependent you may be eligible for one of the education deductions or credits. You have to claim him as a dependent in order to get one of these education credits or deductions. You can deduct eligible education expenses up to specific amounts.
      Please see this blog on eligible education expenses and the credits and deductions available
      http://blog-turbotax-intuit-com-develop.go-vip.co/2011/09/09/tax-considerations-for-college-students/
      TurboTax will guide you through the appropriate questions and put your information on the proper tax forms.
      Thank you,
      Lisa Greene-Lewis

  27. I saw on DailyFinance.com that you could deduct the costs associated with selling your home including the commission you paid your real estate agent, any legal fees and closing costs. Was that only a one year deal?

    • Hi Mark,
      Yes, these costs are deducted as selling expenses from the selling price when figuring your gain our loss. TurboTax guides you through the appropriate questions so you can deduct these expenses.
      Thank you,
      Lisa Greene-Lewis

  28. i file my refund on feb. 5, 2012, it was accepted on feb. 6, 2012. IRS said it was direct deposited on Feb. 15,2012 to turbotax and i am not seeing any money deposited to my account to date.

    • Hi,
      I am sorry about any inconvenience. Was it supposed to be deposited on a refund card? If so, due to the increase in fraud industry wide, tighter security has been put in place on refund cards to protect our customers. Please see the update regarding the refund card:
      Due to a significant rise in fraud across the industry, Intuit has put in place more stringent fraud detection and prevention controls to help ensure that only legitimate cardholders receive the refunds they are entitled to on a TurboTax Refund Card. In a small number of cases, we regret that a hold on some cards may impact legitimate cardholders. You can go here for additional information (see Security & Fraud Prevention): https://turbotaxcard.intuit.com/support/faq_turbotaxcard.html. Please note that the support line included in this article may require some wait time.
      Thank you,
      Lisa Greene-Lewis

  29. I E-filed my taxes on 2/2/12 with turbo taxes, snf it was accepted that same evening by the federal goverenment(IRS) I still have not rec’d it and when I go onto the “where’s my refund” site it just tells me that I must of typed in the wrong info because it can not be found. Could you please help me out with who I need to contact. This is crazy, I know people that e-filed with HR block and rec’d their direct deposit in 3 days, why do we pay for this service at turbo tax and it takes 14 to 21 days?????

  30. this year my anticipated refund is MUCH less than that or prior years, not much has changed. I am wondering why it is so different. Did turbotax take out the Bush Tax cuts? What laws changed? Am I missing something because my refund is normally around 1000k or more and this yr its less than 500. Are the Bush tax cuts still in act with Turbo tax ? If not, I heard they were extended, will there now be a change in Turbo Tax or will everyone have to file a 1040X. I have not filed my return due to this, its so low.

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