AI Tax Answer Library
Find answers to common tax questions. All answers were generated by HIVE Tax AI agents and verified by a professional CPA.
Latest Tax Questions & Answers
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What’s the best way to track personal vs. business expenses?
Track personal and business expenses by keeping separate bank accounts, using dedicated business credit cards, documenting each expense’s purpose, and allocating mixed-use costs proportionally. Use accounting software to automate categorization and maintain compliance.
How do I handle cash transactions in my records?
Record all cash transactions daily, including date, amount, purpose, and customer info. Keep receipts, use a cash log, reconcile regularly, and report large payments over $10,000 using Form 8300.
What is the best method for organizing business receipts?
Organize business receipts using digital tools like QuickBooks or physical filing by year and category. Keep records for at least 3 years, separate personal/business finances, and back up all data for audit readiness.
What is the best method for organizing business receipts?
Organize business receipts using digital tools like QuickBooks, categorize by expense type, and keep records for at least 3 years. Separate personal and business finances for clarity and audit readiness.
How long do I need to retain business tax records?
Keep business tax records for at least 3 years from filing or due date. Employment taxes: 4 years. Property records: as long as owned, plus 3 years. Some cases require 6+ years or indefinite retention.
What records must I keep for business deductions?
Keep detailed records for all business deductions: receipts, invoices, mileage logs, and documentation showing amount, date, purpose, and business relationship. Retain for at least 3 years.
How do I report cryptocurrency received as payment?
Report cryptocurrency received as payment as ordinary income at its fair market value in USD. Use Schedule C or W-2 depending on employment status. Track gains/losses when sold.
Is foreign income from business activities taxable?
Foreign business income is generally taxable in the U.S. U.S. citizens report worldwide income; foreign persons pay tax only on U.S.-source or effectively connected income.
What do I do with a 1099-K received for business income?
Report Form 1099-K income on Schedule C as part of your gross receipts. Reconcile with records, deduct expenses and refunds, and pay tax on net profit. Keep documentation to support your return.
How do I report income from online platforms (Etsy, Amazon, Stripe, PayPal)?
Income from Etsy, Amazon, PayPal, or Stripe is taxable. Report all earnings on Schedule C, track expenses, and pay self-employment tax. Even without a 1099-K, you must report income.
Is advance payment or deposits taxable in the year received?
Advance payments are generally taxable in the year received. Deposits aren’t taxed until earned or conditions are met. Accrual basis taxpayers may defer some payments under IRS rules.
Do I report income on a cash or accrual basis?
Most individuals use the cash method, reporting income when received. Accrual basis reports income when earned. Choose based on IRS rules and your business needs.
How do I report business income and expenses on my personal return?
Learn how to report business income and expenses on your personal tax return using Schedule C. Understand deductions, record-keeping, and common mistakes to avoid.
What are the penalties for late filing or late payment for businesses?
Learn about penalties for late filing or payment for businesses, including failure-to-file fees, late payment charges, and exceptions for reasonable cause.
Can I file an extension for my business tax return, and how?
Yes, you can file an extension for your business tax return using Form 7004. Learn how to request an extension, payment requirements, and deadlines by business type.
What forms do I need to file as an LLC/S Corp/C Corp/Sole Proprietor?
Learn the tax forms required for LLCs, S Corps, C Corps, and Sole Proprietors. Ensure compliance with federal filing requirements for your business entity.
How do I determine my business entity’s filing status?
Determine your business entity’s filing status and tax obligations. Learn about default classifications, Form 8832 elections, and filing requirements for LLCs, corporations, and more.
Do I need to file quarterly estimated taxes in 2025?
Generally, the tax code requires taxpayers to pay federal income taxes as they earn income. To the extent these taxes are not withheld, a taxpayer must pay estimated income tax on a quarterly basis.
What are the 2024 tax filing deadlines for my business entity?
Discover the 2024 tax filing deadlines for your business entity, including C Corporations, S Corporations, Partnerships, and more. Stay compliant and avoid penalties.
Can I claim moving expenses if I relocated for a new job in 2025?
Moving expenses for a new job in 2025 are not deductible unless you’re an active-duty military member. Learn about exceptions, record-keeping, and future eligibility.
How does adoption affect my tax return?
Adopting a child can provide tax benefits like the Adoption Tax Credit and dependency exemptions. Learn how adoption impacts your tax return and maximize your savings.
How do I file taxes if my spouse passed away in 2025?
If your spouse passed away in 2025, learn how to file taxes, including joint filing for 2024 and qualifying as a surviving spouse for future tax benefits.
How does getting divorced affect my filing status and deductions this year?
Divorce impacts tax filing status and deductions. Learn how to determine your status, claim deductions, and plan for tax changes post-divorce.
Why Is My Refund Smaller Than Expected This Year?
There are several common reasons why your tax refund might be smaller than you expected this year. Understanding these factors can help you make sense of the difference between your anticipated and actual refund amount.
How Can I Track the Status of My Refund?
You can track the status of your tax refund through several official IRS methods. Here’s a comprehensive guide on how to check your refund status:
How Long Does It Take to Receive My Tax Refund After Filing Electronically?
When you file your tax return electronically, you can generally expect to receive your refund within 21 days, though the exact timing can vary based on several factors.
What Are the Penalties for Withdrawing Early from a 401(k) or IRA in 2025?
Early withdrawals from retirement accounts in 2025 will generally be subject to both income tax and additional penalties, with certain exceptions. Here’s a comprehensive breakdown of the penalties and tax implications:
Are Roth IRA Contributions Deductible on My Taxes?
No, Roth IRA contributions are not deductible on your taxes. This is one of the fundamental differences between Roth IRAs and traditional IRAs.
Can contributions to an IRA reduce my taxable income?
Yes, contributions to an IRA can reduce your taxable income, but the deductibility depends on the type of IRA, your income level, and whether you or your spouse are covered by a retirement plan at work.
Are Distributions from Retirement Accounts Taxable in 2025?
Yes, distributions from retirement accounts will generally be taxable in 2025, with specific tax treatment depending on the type of retirement account, the nature of the distribution, and your individual circumstances.
What Tax Forms Do Freelancers Need to File?
Freelancers, as self-employed individuals, have specific tax filing requirements that differ from traditional employees. Here’s a comprehensive guide to the tax forms freelancers need to file:
Can I Deduct Home Office Expenses If I’m Self-Employed?
Yes, as a self-employed individual, you can deduct home office expenses on your tax return, but there are specific requirements you must meet to qualify for this deduction.
What Expenses Can Self-Employed Individuals Deduct on Their Returns?
Self-employed individuals can deduct a wide range of business expenses on their tax returns. These deductions help reduce taxable income and the overall tax burden. Here’s a comprehensive breakdown of deductible expenses for self-employed individuals:
Do Self-Employed Individuals Need to Pay Estimated Taxes Quarterly?
Yes, self-employed individuals generally need to pay federal income taxes as they earn income throughout the year. To the extent these taxes are not withheld, a taxpayer must pay estimated income tax on a quarterly basis.
Am I eligible for the Earned Income Tax Credit (EITC)?
You may qualify for the Earned Income Tax Credit (EITC) if you have earned income, meet income limits, and fulfill other requirements like filing status and residency.
What is the Saver’s Credit, and am I eligible for it?
The Saver’s Credit is a tax credit for low- to moderate-income taxpayers who contribute to retirement plans, with credits up to $1,000 per person.
Am I eligible for the Premium Tax Credit for health insurance?
You may qualify for the Premium Tax Credit if you buy insurance through the Marketplace, earn 100-400% of the Federal Poverty Line, and meet other requirements.
Is there a tax credit for purchasing an electric vehicle in 2025?
Yes, a $7,500 tax credit is available for new electric vehicles in 2025 under the Clean Vehicle Credit, subject to battery and mineral sourcing rules.
Is there a credit for installing energy-efficient appliances or solar panels in my home?
Yes! You can claim a 30% federal tax credit for energy-efficient appliances (up to $1,200/year) and 30% for solar panels (no annual limit) under IRS credits 25C and 25D.
How does the Adoption Tax Credit work, and what is the maximum amount?
The Adoption Tax Credit allows adoptive parents to claim up to $16,810 per child in 2024 for qualified expenses like legal fees and travel; it’s nonrefundable but can be carried forward for up to five years.
Can I claim the Lifetime Learning Credit for continuing education courses?
Yes, you can claim the Lifetime Learning Credit for continuing education courses—including non-degree, part-time, or professional development classes—at eligible institutions, with a maximum annual credit of $2,000 per tax return.
How do education tax credits like the American Opportunity Credit work?
The American Opportunity Tax Credit (AOTC) offers up to $2,500 per eligible student for qualified college expenses, with up to $1,000 refundable—even if you owe no tax.
Can I claim the Child and Dependent Care Credit for daycare costs?
Yes, you can claim the Child and Dependent Care Credit for daycare costs if the care enables you to work or look for work and meets IRS eligibility rules.
What is the Child Tax Credit amount for 2025?
For 2025, the Child Tax Credit is $2,000 per qualifying child under 17, with up to $1,700 refundable as the Additional Child Tax Credit.
Are commuting costs deductible for remote workers returning to the office?
Commuting costs for remote workers returning to the office are not tax-deductible, as they are considered personal expenses under IRS rules.
Can I deduct expenses for caring for an elderly parent at home?
You may be able to deduct expenses for caring for an elderly parent at home if they qualify as your dependent and the expenses exceed 7.5% of your adjusted gross income; you might also qualify for the Dependent Care Credit or claim your parent as a dependent under certain conditions.
Is mortgage insurance premium (PMI) deductible this year?
Mortgage insurance premiums (PMI) are not deductible for the 2024 tax year, as the deduction expired at the end of 2021. It is not available for subsequent tax years.
Can I deduct expenses for adopting a child in 2025?
In 2025, adoption expenses can be claimed through the adoption tax credit, offering up to $17,280 per child, subject to income limitations. This credit reduces your tax liability dollar-for-dollar.
Are legal fees deductible on my taxes?
Legal fees may be deductible if they are business-related, tax-related, or tied to rental properties. Personal legal fees, including divorce costs, are typically not deductible.
Can teachers still deduct classroom expenses, and what is the limit?
Teachers can deduct up to $300 in classroom expenses in 2024, including supplies and professional development costs. Married educators can claim up to $600 jointly.
Are union dues deductible this year?
Union dues are not deductible on federal income tax returns for 2024 due to the TCJA suspension, lasting through 2025. Deductions may resume in 2026.
Can I deduct moving expenses in 2025?
In 2025, most taxpayers cannot deduct moving expenses, except for active-duty military members moving under military orders.
Can I deduct home office expenses if I work remotely?
Yes, you can deduct home office expenses if you work remotely, but you must meet IRS criteria like exclusive use and regular business activity.
How do I deduct charitable donations on my taxes?
To deduct charitable donations, itemize on Schedule A and give to qualified charities. Keep receipts and follow IRS rules for documentation.
Can I claim medical expenses as a deduction, and what qualifies?
You can deduct medical expenses that exceed 7.5% of your AGI if you itemize deductions—qualified costs include insurance, treatments, supplies, and more.
Can I deduct student loan interest in 2025?
Yes, you can deduct up to $2,500 in student loan interest for 2025, subject to income limits and other eligibility rules—even if you take the standard deduction.
What is the standard deduction amount for 2025?
The standard deduction for 2025 is $15,000 (single), $30,000 (joint), and $22,500 (head of household), with additional amounts for age or blindness.
How are capital gains taxed in 2025?
In 2025, long-term capital gains are taxed at 0%, 15%, or 20% based on income, while short-term gains are taxed as ordinary income up to 37%.
How do I report rental income on my tax return?
Report rental income and expenses on Schedule E (Form 1040). Include rent, deposits kept, and deductible costs like mortgage interest and depreciation.
How do I report stock options or restricted stock units (RSUs)?
Report RSU and stock option income on Form W-2; sales go on Form 8949 and Schedule D. ISOs may also require AMT reporting on Form 6251.
How do I report cryptocurrency transactions on my tax return?
Report cryptocurrency sales, trades, or income on IRS Form 8949 and Schedule D; mining and staking rewards go on Schedule 1 or Schedule C as income.
Do I need to pay taxes on an inheritance received in 2025?
No, you don’t pay federal tax on an inheritance in 2025, but income from inherited assets or state-level taxes may apply depending on your location.
Do I need to report income from foreign countries?
Yes, U.S. citizens and resident aliens must report all worldwide income, including foreign income, on their U.S. tax return, unless legally exempt.
Are life insurance payouts taxable?
Life insurance payouts are generally not taxable, but interest, installment payments, employer-owned policies, and some transfers may trigger taxes.
Do I need to report interest earned on savings accounts?
Yes, you must report all interest earned on savings accounts as income on your tax return, even if you don’t receive a 1099-INT.
Is alimony received in 2025 taxable?
Alimony received in 2025 is taxable only if your divorce agreement was executed before 2019 and hasn’t been modified to exclude it from income.
Are scholarships or grants considered taxable income?
Scholarships and grants are tax-free if used for tuition and required expenses by degree candidates, but amounts used for room, board, or compensation for services are taxable.
Do I need to report gambling winnings, and can I deduct losses?
Gambling winnings are fully taxable and must be reported; losses can be deducted only if you itemize and cannot exceed your reported winnings.
Are unemployment benefits taxable in 2025?
Unemployment benefits remain taxable in 2025 under current IRS rules—recipients should report them as income and consider tax withholding.
Are Social Security benefits taxable?
Social Security benefits may be taxable depending on your income—up to 85% could be taxed if your combined income exceeds IRS thresholds
Do I need to report income from selling items online (e.g., eBay)?
Selling items online? Report all income—business sales go on Schedule C, personal gains may be taxable, and losses generally aren’t deductible.
How do I report income from a side hustle or hobby?
Report side hustle income on Schedule C if it’s a business, or Schedule 1 if it’s a hobby—track all income, even without a 1099 form.
Do gig workers need to file Form 1099-NEC for income reporting?
Gig workers don’t file Form 1099-NEC themselves; it’s issued by payers. Still, all income must be reported, even without receiving the form.
Do I need to report income from freelance or gig work (e.g., Uber, Etsy)?
Yes, income from freelance or gig work like Uber or Etsy must be reported and may require paying self-employment tax if earnings exceed $400.
What are the rules for claiming dependents in shared custody situations?
Learn the rules for claiming dependents in shared custody situations, including the custodial parent’s rights, Form 8332, and noncustodial parent exceptions.
Can I claim my elderly parent as a dependent?
Yes, you can claim your elderly parent as a dependent if you provide more than half of their support. Learn the requirements and benefits of claiming them.
Can I file as Head of Household if I’m unmarried but support a dependent?
Yes, you can file as Head of Household if you’re unmarried and support a dependent. Learn the requirements and benefits of this filing status.
How do I file taxes if my spouse passed away in 2025?
Learn how to file taxes if your spouse passed away in 2025, including options for joint returns and qualifying surviving spouse status. Seek professional help if needed.
Can I file jointly with my spouse if we were married in 2025?
If you marry in 2025, you can file jointly for the 2025 tax year. Filing jointly offers tax benefits but comes with shared responsibility for the tax debt.
How do I determine my filing status (e.g., single, married)?
To determine your filing status, consider options like Single, Married, Head of Household, or Qualifying Surviving Spouse. Status affects tax rates and deductions.
Do all states have an income tax, and how do state tax laws differ from federal laws?
Not all states have income tax. Seven states, like Texas & Florida, don’t tax wages. State tax laws differ from federal in rates, deductions, and structures.
How do I file state taxes if I moved between states in 2025?
Moved between states in 2025? You’ll likely need to file part-year resident tax returns for both states. Learn how to allocate income, claim credits, and file correctly.
What is the deadline to file state taxes in 2025?
For most taxpayers, the deadline to file state taxes in 2025 is April 15, 2025, which aligns with the federal tax filing deadline for the 2024 tax year.
Are state refunds taxable on federal returns?
Whether a state tax refund is taxable on your federal return depends on whether you itemized deductions in the year the taxes were paid and received a tax benefit from them.
Do I need to file state taxes if I worked in multiple states in 2025?
If you worked in multiple states in 2025, you may need to file tax returns in each state where you earned income and claim credits to avoid double taxation.
What should I do if my employer hasn’t sent me a W-2?
If your employer hasn’t sent you a W-2, contact them first. If unresolved, call the IRS or file using Form 4852 with estimated wage and tax info.
Can I still file my return if I lost my W-2?
Yes, you can still file your tax return if you lost your W-2. Learn how to request a replacement or use IRS Form 4852 as a substitute to file on time.
How do I set up a payment plan with the IRS?
Learn how to set up a payment plan with the IRS, including online applications, available options, eligibility, fees, and what to expect after enrolling.
What happens if I don’t pay my taxes on time?
Missed the tax deadline? Learn what happens if you don’t pay your taxes on time—penalties, interest, IRS enforcement actions, and how to get help.
How do I file an amended return if I made a mistake?
Learn how to file an amended tax return if you made a mistake. Use Form 1040-X, file electronically or by mail, and track your status online.
What documents do I need to gather before filing my taxes?
Gather essential tax documents before filing in 2025, including W-2s, 1099s, income records, deduction receipts, and ID info. Be prepared and organized.
What are the income thresholds for filing taxes in 2025?
Find out the 2025 income thresholds for filing taxes based on your filing status, age, and deductions. See who must file and when it’s required.
How do I know if I need to file a tax return?
Wondering if you need to file a tax return? Find out based on income, filing status, and special circumstances. Learn when it’s required and when it’s beneficial to file.
What are the penalties for filing late?
Filing your tax return late can lead to a penalty of 5% per month, up to 25% of the unpaid tax. Learn how to avoid penalties and what to do if you’re late.
Does filing an extension give me more time to pay taxes owed?
Filing a tax extension gives you extra time to file, but not to pay. You must pay any taxes owed by the original deadline to avoid penalties and interest.
Can I file for an extension, and how does it work?
You can file a tax extension by April 15 to extend your deadline to October 15. However, taxes owed are still due by April 15 to avoid penalties and interest.
What is the federal tax filing deadline for 2025?
Federal tax filing deadline for 2025 is April 15. Extensions available until Oct 15, but taxes must still be paid by April 15 to avoid penalties.
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