1) Question: What is adjusted gross income?
2) Question: I pay someone to care for my child while I work? Can I deduct this expense?
3) Question: What is an education savings account?
4) Question: What's the best filing status?
5) Question: Can I deduct a home office?
6) Question: Should I itemize my deductions?
7) Question: How long should I keep my tax records?
8) Question: What tax bracket am I in?

Question: What is adjusted gross income?
Answer: Your adjusted gross income (AGI) is your gross income reduced by deductions other than itemized deductions, the standard deduction, and personal exemptions. Deductions used to arrive at your AGI include business expenses, IRA contributions, student loan interest expense, alimony paid, and job-related moving expenses.

Your AGI determines whether you are eligible for more than two dozen tax benefits, such as tax credits, itemized deductions, and exemptions. As your AGI increases, the maximum amount you can claim for certain deductions and credits decreases. For example, your IRA contribution will not be deductible if you are covered under your employer's pension plan and your adjusted gross income exceeds certain limits.

Question: I pay someone to care for my child while I work? Can I deduct this expense?
Answer: No, but you may be able to claim a tax credit, which is more valuable than a tax deduction because it reduces your tax liability dollar for dollar.

You can take the child care credit if you pay someone to care for your child who is under the age of 13, or for a child or other dependent (any age) who is physically or mentally incapable of caring for themselves. You must have earned income in order to claim the credit, and you must need the child care to allow you to work.

The maximum credit is 35%. Eligible expenses are $3,000 for one child and $6,000 for two or more children.

Question: What is an education savings account?
Answer: Originally named education IRAs, these accounts are now called “Coverdell education savings accounts." An education savings account is a custodial savings account created to pay for a child’s school expenses at any accredited college, university, or vocational school. The funds can also be used for elementary and secondary (K-12) school expenses at public, private, or religious schools.

Education savings accounts allow anyone, not just parents, to contribute to an account for any child under age 18. The total contributions made for a child cannot exceed $2,000 per year. To contribute the full amount, your income must be under a certain level.

Contributions are not deductible, but the earnings in the account are never taxed if the money is used to pay for qualifying education expenses, such as tuition, fees, supplies, required equipment, and certain room and board expenses.

Education savings account funds must be used by age 30. If the money is not spent on college by the time the beneficiary is 30 years old, the unspent money must be withdrawn (subject to income tax and a 10% penalty) or rolled over into another family member's education IRA.

Question: What's the best filing status?
Answer: The "best" filing status for you depends upon which status you can qualify for and your particular circumstances. Tax savings are only one consideration when selecting your filing status. For example, you might not want to file a joint return with your spouse for personal reasons. Here are the five filing statuses and the qualifications you must meet to use them.

Single - You can use this status if you are unmarried at the end of the year.

Head of household - You can choose this status if you are single at the end of the year, and you have a dependent and meet certain requirements. In some cases, married, but separated individuals can also use this status. If you're eligible to claim head of household status, you'll probably pay less tax than filing as a single taxpayer.

Married filing joint - You can use this status if you are married at the end of the year. However, you cannot use this status if you are legally separated on the last day of the year.

Married filing separate - You can use this status if you are married, but choose not to file a joint return with your spouse or if you are legally separated on the last day of the year.

Qualifying widow(er) - You can choose this status if your spouse died in the last two years, you claim a dependent, and you meet certain other requirements. You then can use the more favorable tax rates for married filing jointly rather than the rates for single taxpayers.

Question: Can I deduct a home office?

Question: How long should I keep my tax records?
Answer: Just how long to keep your records is a matter of judgment and a combination of state and federal statutes of limitation. The IRS can audit your return for up to three years after you file a return. However, if you omit more than 25% of your income from a return, that period increases to six years. To be safe, keep tax records for seven years after the filing date

Question: What tax bracket am I in?