11 Tax Questions You’re Too Embarrassed To Ask

If you want to get ahead financially — and stay there — it’s crucial to have a basic understanding of the tax code.

Taxes can be a daunting topic for many people, and it's common to have questions you might feel too embarrassed to ask. But whether you're a seasoned taxpayer or navigating tax season for the first time, it's essential to address your uncertainties.

Here are 11 common tax questions that many people have, and clear answers that can help you make informed decisions about your finances.

The deadline to file federal income tax returns in the U.S. this year is Monday, April 15.

If you live in Maine or Massachusetts, you have until April 17 due to the Patriot’s Day and Emancipation Day holidays. It's essential to mark your filing date on your calendar and file your taxes promptly to avoid penalties and interest charges for late filing.

Filing your taxes early offers several benefits, including faster processing of your return and potential early access to any refunds owed to you.

Additionally, filing early can help save you extra money on tax professionals who may charge a premium to file your taxes at the last minute instead of well in advance of the Tax Day deadline.

While it's best to file your taxes by the deadline to avoid penalties and interest, you can ask for an automatic extension if you think you won’t be able to file on time.

Just be aware that the extension is for you to file a return. There is no extension to pay any taxes you owe.

If you don’t ask for an extension and file late, the IRS may impose penalties such as fines and interest for late filing. These fees can increase over time. However, it's better to file late than not file at all.

Generally, if your gross income is at or over the filing requirement of $13,850 (for single filers under the age of 65 at the end of 2023) or if you have over $400 in net earnings from self-employment — side jobs or other independent work — you need to file a federal tax return.

The amounts differ for those with other filing statuses.

However, even if you don't meet the filing requirements, it may still be beneficial to file so you can claim any refunds or tax credits you are entitled to receive.

If you cannot pay the taxes you owe to the IRS, you should still file your tax return on time to avoid additional penalties for late filing.

The IRS offers various options for taxpayers facing financial difficulties, such as installment payment plans. It's essential to communicate with the IRS and explore these options to resolve your tax debt.

The time frame for receiving your tax refund depends on various factors, including how you file your return and when you file it.

Generally, if you file your tax return electronically and opt for direct deposit, you can expect to receive your refund in less than 21 calendar days. However, if you file a paper return, it may take longer for your refund to arrive.

The IRS may withhold your tax refund if you have outstanding debts, such as unpaid federal taxes, state income taxes, or child support payments.

This process, known as an offset, allows the IRS to redirect your refund to satisfy these debts. If your refund is subject to offset, you will see this noted when using the IRS website tool known as Where’s My Refund?

The IRS uses various criteria to select tax returns for audit both for individuals and organizations. The agency focuses on areas with a higher risk of noncompliance or errors.

In some cases, audits are random. However, maintaining accurate records, reporting income correctly, and following tax laws can reduce your chances of being audited. If selected for an audit, you will be notified by mail.

You can deduct charitable donations made to qualified charitable organizations from your taxable income. However, you can only deduct charitable contributions if you itemize deductions on Schedule A (Form 1040).

It is essential to keep detailed records of your donations — including receipts or acknowledgment letters from charitable organizations — to substantiate your deductions in case of an IRS audit.

You may be able to deduct medical and dental expenses — including health insurance premiums — you paid for yourself, your spouse, and your dependents during the taxable year that exceed 7.5% of your adjusted gross income for the year.

It’s worth noting that these expenses will also need to be itemized on Schedule A (Form 1040) to deduct them from your taxes. If you do not itemize, you cannot deduct the premiums.

Self-employed individuals may be eligible for the self-employed health insurance deduction.

If you use part of your home regularly and exclusively for business purposes, you may be eligible to deduct home office expenses on your tax return.

However, the rules for claiming home office deductions are stringent, and the space must be used solely for business activities. It's essential to familiarize yourself with the IRS guidelines regarding home office deductions before taking this tax break.

Asking questions about taxes — no matter how basic or seemingly embarrassing — is essential to boosting your financial fitness.

Whether you're unsure about filing deadlines, deductions, or the tax implications of certain transactions, seeking answers to your tax questions can help you navigate tax season with confidence and maximize your savings.