Featured question · Taxes & homeownership
If I maximize my business tax deductions, will it hurt my chances of qualifying for a mortgage?
This is an important question for self-employed individuals who plan to purchase a home.
Business deductions can lower your taxable income, which may help reduce your tax bill. However, mortgage lenders often review your tax returns to determine your qualifying income. If your reported income is significantly reduced, it could affect how much you qualify to borrow.
The good news is that certain business deductions, such as eligible depreciation and other allowable adjustments, may be added back when lenders calculate qualifying income. The specific treatment depends on the mortgage program, your business structure, and the lender’s underwriting guidelines.
At ZigZag Tax, we understand that tax planning and homeownership goals go hand in hand. We can help you understand how your business deductions may affect your financial picture so you can make informed decisions before filing.
Mortgage qualification, including which deductions are added back and how much you can borrow, is determined by your lender. Talk with your lender about your specific loan program. Read our tax tip on this topic
Do I need to file a tax return if I didn’t make much money this year?
Not everyone is required to file a federal income tax return. Filing requirements depend on several factors, including your income, age, filing status, and type of earnings.
However, even if your income falls below the filing threshold, you may still benefit from filing. You could qualify for a tax refund or valuable tax credits that put money back in your pocket. Certain situations, such as earning income from self-employment, may also require you to file regardless of your total income.
At ZigZag Tax, we’ll help you understand your filing requirements and identify refunds and credits you may be eligible to claim.
What if I owe taxes but can’t afford to pay the full amount?
Owing taxes can feel overwhelming, but you have options.
The IRS offers payment arrangements that may allow eligible taxpayers to pay their balances over time. Depending on your financial situation, other tax relief options may also be available.
The most important thing is not to ignore your tax filing deadline. Even if you cannot pay your full balance, filing your return on time can help you avoid additional penalties. An extension to file does not extend the deadline to pay taxes owed, and interest or penalties may still apply.
ZigZag Tax can help you understand your options and take the next steps toward resolving your tax obligations.
I have a side hustle or small business. What expenses can I deduct?
If you’re self-employed, an independent contractor, a freelancer, or a small business owner, you may qualify for valuable business tax deductions.
Depending on your business activities, eligible expenses may include:
- Business-related supplies and equipment
- Advertising and marketing expenses
- Business use of your vehicle
- Qualifying home office expenses
- Professional services and software
- Business insurance and other operating expenses
Generally, deductible business expenses must be ordinary and necessary for your business, and you should maintain appropriate records to support them.
At ZigZag Tax, we help entrepreneurs and independent professionals identify eligible deductions, reduce their tax liability where permitted, and keep more of their hard-earned money.
Can I use my federal tax refund to pay taxes I owe to the state?
Your federal and state income tax returns are generally processed separately. If you receive a federal tax refund but owe state income taxes, the refund is not automatically applied to your current state tax bill simply because you filed both returns.
You will typically need to make a separate payment to your state’s tax agency by the applicable payment deadline to avoid potential penalties and interest.
However, if you have certain past-due state income tax debts, your federal refund may be reduced through the Treasury Offset Program and applied toward those debts.
ZigZag Tax can help you understand your federal and state tax obligations, identify applicable payment deadlines, and avoid unnecessary surprises.
Stress-free taxes, done right. ✓
At ZigZag Tax, we believe tax preparation should be clear, accurate, and stress-free. Whether you’re filing an individual return, managing a small business, or planning for major financial goals, we’re here to help you navigate the process with confidence.
Ready to get started? Contact ZigZag Tax today and let us take the stress out of tax season.
