All QA

  • Was my ITIN expired?

    If your ITIN wasn’t included on a U.S. federal tax return at least once for tax years 2018, 2019, and 2020, your ITIN will expire on December 31, 2021. 
    ITINs with middle digits (the fourth and fifth positions) “70,” “71,” “72,” “73,” “74,” “75,” “76,” “77,” “78,” “79,” “80,” “81,” “82,” “83,” “84,” “85,” “86,” “87,” or “88” have expired. In addition, ITINs with middle digits “90,” “91,” “92,” “94,” “95,” “96,” “97,” “98,” or “99,”
    IF assigned before 2013, have expired. 

    (Sourse: IRS)
  • What's the different between standard deduction and itemized deduction?

    The standard deduction may be quicker and easier, but, itemizing deductions may lower taxes more, in some situations. Following tax law changes, cash donations of up to $300 made by December 31, 2020 are deduction without having to itemize when people file a 2020 tax return.

    For standard deduction, it depends on the taxpayer's filing status, whether they are 65 or older or blind, and whether another taxpayer can claim them as a dependent. 

    For itemizing deduction, Taxpayers may itemize deductions because that amount is higher than their standard deduction, which will result in less tax owed or a larger refund. In some cases, they not allowed to use the standard deduction.


    A taxpayer may benefit by itemizing deductions if any of following apply to their tax situation, they:

    • Had large uninsured medical and dental expenses
    • Paid interest and taxes on their home
    • Had large uninsured casualty or theft losses
    • Made large contributions to qualified charities

    Individual itemized deductions may be limited. 


  • Is the loss on the sale of my home deductible?

    Maybe. A loss on the sale or exchange of personal use property, including a capital loss on the sale of your home used by you as your personal residence at the time of sale, or loss attributable to the part of your home used for personal purposes, isn't deductible. Only losses associated with property (or a portion of property), used in a trade or business and investment property (for example, stocks) are deductible.

  • Do I need to pay taxes on the additional stock that I received as the result of a stock split?

    No. In a stock split, the corporation issues additional shares to current shareholders, but your total basis doesn't change. Following a stock split, you must reallocate your basis between the original shares and the shares newly acquired in the stock split.

    • Stock splits don't create a taxable event; you merely receive more stock evidencing the same ownership interest in the corporation that issued the stock. You don't report income until you sell the stock.
    • Your overall basis doesn't change as a result of a stock split, but your per share basis changes. You'll need to adjust your basis per share of the stock.
      For example, you own 100 shares of stock in a corporation with a $15 per share basis for a total basis of $1,500. In a 2-for-1 stock split, the corporation issues an additional share of stock to the shareholder for each share the shareholder owns. You now own 200 shares, but your total basis is still $1,500. Following the stock split, you must reallocate your basis between the original shares and the shares newly acquired in the stock split. Your basis per share is now $7.50 ($1,500 divided by 200) for each of the 200 shares.

    (Source: IRS)
  • How do I figure the cost basis when the shares I'm selling were purchased at various times and at different prices?

    The basis of stocks or bonds you own generally is the purchase price plus the costs of purchase, such as commissions and recording or transfer fees. When selling securities, you should be able to identify the specific shares you are selling.

    If you can identify which shares of stock you sold, your basis generally is:

    • What you paid for the shares sold plus any costs of purchase.

    If you can't adequately identify the shares you sold and you bought the shares at various times for different prices, the basis of the stock sold is:

    • The basis of the shares you acquired first, then the basis of the stock later acquired, and so forth (first-in first-out). Except for certain mutual fund shares and certain dividend reinvestment plans, you can't use the average basis per share to figure gain or loss on the sale of stock.

  • What is the purpose of Form W-8 BEN?

    Foreign persons are generally subject to U.S. withholding tax at a 30% rate on the gross amount of certain income they receive from U.S. sources. By providing a completed Form W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, to the U.S. payer (also known as the U.S. withholding agent) before or at the time income is paid or credited, you are:

    • Establishing that you are not a U.S. person,
    • Claiming that you are the beneficial owner of the income for which Form W-8 BEN is being provided, and
    • If applicable, claiming a reduced rate of, or exemption from, withholding as a resident of a foreign country with which the United States has an income tax treaty. In order to claim a reduced rate or exemption from tax under an income tax treaty, the Form W-8 BEN must include a valid U.S. taxpayer identification number.

    The completed Form W-8 BEN is provided to the U.S. payer (also known as the U.S. withholding agent) before or at the time income is paid or credited. This form is not filed with the U.S. Internal Revenue Service. 


  • I am a US citizen residing aboard. I file my U.S. Federal income tax return every year using my permanent foreign address. I just received a letter from my U.S. bank along with a Form W-8 BEN . Does this form apply to me?

    In general, Form W-8 BEN only applies to certain payments to foreign persons.

    Since you are a U.S. citizen, regardless of where you live, you should provide your U.S. bank or payer with a completed Form W-9, Request for Taxpayer Identification Number and Certification, to:

    • Certify that the tax identification number you are giving is correct (or you are waiting for a number to be issued),
    • Certify that you are not subject to backup withholding, or
    • Claim exemption from backup withholding applicable to payees that do not provide a valid TIN tax identification number or are U.S. exempt payees.

    Please refer to Form W-9 Instructions for more details.


  • I'm concerned because my check payment to the IRS hasn't been cashed yet. What should I do?

    Before contacting the IRS, first check with your financial institution to verify whether the check has cleared your account.

    If it's been at least two weeks since you sent the payment to the IRS and your financial institution verifies that the check hasn't cleared your account, call the IRS's toll-free number at 800-829-1040 to ask if the payment has been credited to your tax account.

    Get up-to-date status on IRS operations and services affected by COVID-19.

    If the payment hasn't been credited and your check hasn't cleared, you may choose to place a stop payment order on the original check and send another payment. If you choose this option, the IRS won't charge a dishonored check penalty. And you may be reimbursed for bank charges related to stopping payment. See the Form 8546, Claim for Reimbursement of Bank ChargesPDF for more information on claiming reimbursement of bank charges.

    Payment methods:

    See our Payments page for all payment options.

  • I am a U.S. citizen marries to a nonresident alien. What is my filling status and can I claim an exemption for my foreign spouse?

    In general, if you are a U.S. citizen or resident alien married to a nonresident alien,
    (1) You are considered “Married Filing Separately” unless you qualify for a different filing status. 
    (2) If you pay more than half the cost of keeping up a home for yourself and a qualifying child or other relative, you may qualify for the head of household filing status.

    (3) If you are a U.S. citizen or resident alien married to a nonresident alien, you and your spouse can choose to have your spouse treated as a U.S. resident for all U.S. federal income tax purposes. This allows you and your spouse to file a joint return, but also subjects your nonresident alien spouse’s worldwide income to U.S. income tax.


  • What are my responsibilities as a green card holder if I have been absent from the United States for a long period of time?

    As a green card holder, you generally are required to file a U.S. income tax return and report worldwide income no matter where you live.

    However, if you surrender your green card or the U.S. Citizen & Immigration Service determines that you have abandoned your green card and takes it away from you, you will need to follow the nonresident alien requirements for filing a Form 1040-NR, U.S. Nonresident Alien Income Tax Return.