Frequently Asked Questions

Federal Tax

There are multiple ways to do this:

  • Use IRS Form 8822.
  • Use your new address when you file.
  • Written and signed statement with your full name, old address, new address, and identification number (SSN or EIN) to the address where you last filed your return.
  • Go to an IRS office in person or call the IRS on the phone and state your full name, address, date of birth, and identification number (SSN or EIN).

*if you file jointly and currently reside together, you both must sign the form or statement.

Generally, you must make estimated tax payments for the current tax year if both of the following apply:

  • You expect to owe at least $1,000 in tax for the current tax year after subtracting your withholding and refundable credits.
  • You expect your withholding and refundable credits to be less than the smaller of:
    • 90% of the tax to be shown on your current year’s tax return, or
    • 100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

There are special rules for:

  • Farmers and fishermen
  • Certain household employers
  • Certain higher income taxpayers
  • Nonresident aliens

To claim your child as your dependent, your child must meet either the qualifying child test or the qualifying relative test:

  • To meet the qualifying child test, your child must be younger than you and either younger than 19 years old or be a “student” younger than 24 years old as of the end of the calendar year.
  • There’s no age limit if your child is “permanently and totally disabled” or meets the qualifying relative test.

In addition to meeting the qualifying child or qualifying relative test, you can claim that person as a dependent only if these three tests are met:

  1. Dependent taxpayer test
  2. Citizen or resident test, and
  3. Joint return test

Yes, you can use Form 1040EZ (Income Tax Return for Single and Joint Filers with No Dependents) to claim the Earned Income Credit profided you do not have a qualifying child and your investment income is $3,400 or less (for 2016). Your investment income is the total amount of interest from line 2 of Form 1040EZ and any tax-exempt interest. If you do not meet the requirements for filing Form 1040EZ, you must use Form 1040A or Form 1040 (U.S. Individual Income Tax Return). Even using these other forms, you cannot claim the Earned Income Credit if your investment income is more than $3,400.


Generally, an S corporation must make installment payments of estimated tax for the following taxes if the total of these taxes is $500 or more:

  • Tax on built-in gains,
  • Excess net passive-income tax,
  • Investment credit recapture tax.

Although these forms are called information returns, they serve different functions.

Employers use Form W-2, Wage and Tax Statement to:

  • Report wages, tips, and other compensation paid to an employee.
  • Report the employee’s income and social security taxes withheld and other information.

Employers furnish the Form W-2 to the employee and the Social Security Administration. The Social Security Administration shares the information with the Internal Revenue Service.

Payers use Form 1099-MISC, Miscellaneous Information or Form 1099-NEC, Nonemployee Compensation to:

  • Report payments made of at least $600 in the course of a trade or business to a person who’s not an employee for services (Form 1099-NEC).
  • Report payments of $10 or more made in the course of a trade or business in gross royalties or payments of $600 or more made in the course of a trade or business in rents or for other specified purposes (Form 1099-MISC).
  • Report payment information to the IRS and the person or business that received the payment.

Colorado Tax

The passage of Proposition 116 recently changed the Colorado income tax rate. The new Colorado income tax rate is 4.55%, beginning in the 2020 tax year. 

In 2019, the Colorado income tax rate was temporarily reduced to 4.50%, because a TABOR refund mechanism was triggered. From 2000 to 2018, the Colorado income tax rate was 4.63%. 

Yes. You must determine your federal income tax by preparing your federal return first, then you can complete the Colorado return.

The state does not retain paper copies of taxpayers W-2s. However, there are several options for obtaining this information:

  • Contact your employer or previous employer to obtain a copy.
  • If you have your final pay stub that includes the amount of taxes withheld for Colorado, you can use this information to electronically file your state income tax return or to fill out a Substitute Colorado W-2 Form (DR 0084) to send with your paper return.

For federal W-2 information you must contact the IRS.

Several special rules apply in determining the Colorado income tax liability of an active duty or retired military servicemember. Whether and how a servicemember’s income is taxed depends largely on the service-member’s state of legal residence. Additionally, military retirement benefits may be fully or partially exempted from Colorado taxation.

Have a question for us? Call ToshTax today at (303) 523-4022 for a free consultation.