Tax Returns & Refunds: How To’s

  • DescriptioWhen Savutax completes your tax return, and you have paid for the services, we then submit your return to the tax agencies. Once the returns have been submitted, we no longer have control or visibility of your tax return filing progress.  

    You can check the IRS website and check the state's website for the status of the refund. Notices sent from the tax agencies will go directly to you. Savutax does not receive notices on your behalf except in cases where we represent you during an audit. You receive the notice in the mail or it sometimes is on the IRS website when you look up your refund status. If you do receive a notice, please upload it to your account for us to review. Please see our Home page and click the IRS.Gov button to be redirected.  n text goes here

  • Description tePlease upload all relevant tax documents to your Tax Dome portal once you have received your welcome email. Remember to verify that you are uploading documents for the correct tax year so that your documents are not mixed with documents from prior years. Please do not send your tax documents via email unless we instruct you to do so. In which case, we will give you a secure email address to use. xt goes here

  • Every person’s tax situation is different even if they have the same job and earn the same salary. The differences could be how the W-4 form was completed which tells your payroll department how much money to withhold from your paycheck for tax purposes. 

    It could also be the difference between a married person with or without dependents versus a single person. Another example is if someone worked the full 12 months versus someone who only worked a few months for the current tax year. 

    For example, two colleagues may earn the same salary and have identical withholding. However, one person worked for the full year, and the other worked for 6 months. The person who worked the full year will potentially receive a higher refund because they earned more and had more tax withholding than the colleague who only worked for six months.

    Please be aware that we cannot discuss another person’s tax situation due to privacy laws.

  • Unfortunately, we have no control over who or why a tax return is selected for examination. Generally, the state and the IRS use random methods to choose tax returns for examination. If the IRS or state needs further information they will send out a notice directly to you. Protection Plus is an excellent way to cover yourself in case your return is selected for an audit. For questions or assistance, please feel free to reach out to us.  

    Tax extensions and More!

  • A tax extension gives taxpayers additional time to file their income tax returns with the IRS or state tax agency. While the extension delays the due date for filing the paperwork, it does not extend the time to pay any taxes owed. If taxes are owed, interest will begin to accrue the day after the tax deadline. However, if taxes are owed, a penalty will not be assessed with the extension. 

    The extension of time to file is for 6 months. Individuals and businesses can file an extension. 

  • In the United States, you have 3 years to claim a refund. While it is true that a tax return is required to be filed yearly if your income exceeds the gross earnings threshold (see below), there are no financial repercussions with returns that are due for a refund if the return is filed after the tax deadline. Meaning that you will not get in trouble if you file your tax return after the tax deadline. That being said, there may be other reasons why you would want to file your tax return timely. For example, applying for a mortgage, or student loan. In many cases, showing the extension form instead of the tax return will be acceptable.  

    Keep in mind, that roughly 162 million returns are processed by the IRS yearly. 129 million are processed between late January and April 15th.  Knowing that you will get a refund and you do not have to file by the tax deadline and file an extension instead, should provide some stress relief during the very busy tax season. 

  • The IRS sets minimum income thresholds based on gross income, which is all income received in the form of money, goods, property, or services.

    Filing Thresholds for Single Filers (Under Age 65)

    If you are a single filer under 65, you must file if your gross income is at least $14,600 for 2024. Since you earned only $10,000, you generally would not need to file a tax return. However, you may want to file if you had Federal and State withheld from your paycheck. Filing a tax return is the way to obtain a refund. 

    The threshold for a single filer over the age of 65 is $16.550 for tax year 2024. 

  • If social security is your only income source, then filing a tax return is not required. However, if you have Federal taxes withheld, you may want to file a return to obtain a refund. 

  • If your son helps with your living situation, he may be able to claim you on his tax return. He must be able to pass the support test and provide more than 50% of your total support for the year. You must also be a U.S. Citizen, a resident alien, or a resident of Canada or Mexico. Your income cannot exceed $5,050 for 2024 (not including social security income). 

International Corner

  • Resident Alien

    • Definition: A resident alien is a non-U.S. citizen who meets either the Green Card Test or the Substantial Presence Test, qualifying them as a resident for tax purposes.

      • Green Card Test: The person holds a lawful permanent resident status (a green card) at any time during the tax year.

      • Substantial Presence Test: The person has been physically present in the U.S. for:

        • At least 31 days during the current tax year, and

        • A total of 183 days during the current and previous two years (calculated using a specific formula).

    • Tax Responsibilities:

      • Treated similarly to U.S. citizens for tax purposes.

      • Required to report worldwide income on their U.S. tax return.

      • Eligible for tax benefits such as standard deductions and credits.

    • Form to File: Typically, resident aliens file a Form 1040.

    Nonresident Alien

    • Definition: A nonresident alien is a non-U.S. citizen who does not meet either the Green Card Test or the Substantial Presence Test.

    • Tax Responsibilities:

      • Only taxed on income from U.S. sources or income effectively connected with a U.S. trade or business.

      • Not required to report income earned outside the U.S., unless connected to U.S. activities.

      • May not be eligible for standard deductions and certain tax credits.

    • • Form to File: Typically, nonresident aliens file a Form 1040-NR.

  • If filing using a tax treaty, you are considered a nonresident alien for tax purposes even though you pass the substantial presence test. For everything else, you are considered a resident alien. 

  • If you pass the substantial presence test, then you will file a Form 1040 for your taxes. If you do not pass the substantial presence test, then you will file Form 1040NR for nonresident aliens.

  • As a resident alien, you are required to disclose your worldwide income on your US tax return and possibly pay taxes on the income. However, you may be eligible for the Foreign Earned Income Exclusion.

  • The Foreign Earned Income Exclusion allows a U.S. Citizen and qualifying resident aliens who have sourced income, or live and work abroad to exclude up to $126,500 of their foreign-earned income from U.S. taxation for 2024.

Traditional IRA vs. Roth IRA

  • A Traditional IRA and a Roth IRA are both retirement savings accounts in the United States but they are different in how contributions, withdrawals, and taxes are handled. 

    Traditional IRA – Contributions are usually tax-deductible in the year the contribution is made, reducing your taxable income for that year. Deduction eligibility will depend on your income, and if married, you and your spouse is covered by a workplace retirement plan. 

    • Contribution Limits: - The current contribution limit is $6,500 for 2024 and $7,500 if over the age of 50. 

    • Funds within the Traditional IRA can grow with your contributions, investments, interest, and dividends earned.

    • When you are at retirement age, the withdrawals are considered taxable income. These funds can also affect your social security benefits possibly making the social security benefits taxable as well. 

    • Early withdrawals – Generally, early withdrawals are subject to a 10% penalty if the withdrawal is taken before age 59 ½, plus taxes unless an exemption applies. Examples of exemptions are first-time home purchase, qualified education, or medical expenses. 

    Roth IRA – Contributions are made with after-tax dollars so contributions are not tax-deductible. 

    • Contribution Limits: - The current contribution limit is $6,500 for 2024 and $7,500 if over the age of 50. There are also income restrictions with Roth contributions. For 2024, the income limit amount is $153,000 for single filers and $228,000 for married filing jointly. This means that if your income is above these thresholds, you are not eligible to contribute to a Roth IRA. However, you may be able to use a back door Roth. Please see below for additional information. 

    • Funds within the Roth IRA can grow with your contributions, investments, interest, and dividends earned.

    • When you are at retirement age, the withdrawals are not considered taxable income since you contributed to the Roth IRA using after-tax dollars.  

    • Early withdrawals – Contributions (not earnings) can be withdrawn at any time without taxes or penalties. However, there may be a 10% penalty for early withdrawal if the funds were in the Roth IRA for less than 5 years. 

  • The Backdoor Roth IRA is a strategy that allows individuals whose income exceeds the income limits for contributing directly to a Roth IRA. The strategy allows for an indirect contribution. It involves converting funds from a Traditional IRA to a Roth IRA taking advantage of the traditional IRA which does not have any income limits.

Other Questions

    • $1 Million Tax Audit Defense – If you receive a notice from the IRS or state, Protection Plus has a team of EAs and CPAs available to help. All of these case resolution specialists are full-time employees of Protection Plus, and each case is assigned to a designated representative so that you will always receive personal service. The program is designed to be flexible – Protection Plus can work directly with you, or through Savutax, or a combination of both to resolve audits and inquiries. With the new $1 Million Tax Audit Defense guarantee, Protection Plus is committed to spending up to $1,000,000 in services to find a favorable resolution for you and your clients. 

    • Identity Theft Restoration – The identity theft restoration service will assist with any kind of identity theft incident, even outside of taxes. In the event you encounter an identity breach, we will provide 6 months of daily credit monitoring, place fraud alerts on your credit records, notify local authorities, and provide a personalized ID Recovery Kit to ensure that your identity is completely restored. Protection Plus includes a full year of access to this service. 

    • $2,500 Tax Preparation Guarantee – You can rest assured knowing that a $2,500 Tax Preparation Guarantee supports your tax preparation services. This guarantee ensures that your tax return is prepared with the utmost accuracy and attention to detail. If a legitimate error is made in preparing a taxpayer’s return, we’ll provide reimbursement for additional fees, penalties, and interest up to $2,500.

    • Keep in mind that Protection Plus is an optional membership. Not choosing the service will not affect your tax filing.