FAQ'S on Due Diligence

Required "Due Diligence" Documentation

To comply with annual IRS rules and protect your tax credits, we must refresh your file with 2025-specific proof. Please provide the following documents if they apply to your situation:

1. For Dependents (EIC/CTC Verification)

The IRS needs to see that your child lived with you for more than half the year and is legally related to you.

• Primary Document: Form 1095-B (Health Coverage). This is the "gold standard" because it links your name and the dependent's name to a specific tax year.

• Backups (If you don't have a 1095-B):

  • School Records: A report card or enrollment letter showing the child's address.

  • Medical Records: A statement from a doctor or dentist's office.

  • Housing/Childcare: A letter from a daycare provider or a lease that lists the child as an occupant.

2. For Education Credits (AOTC/LLC)

To claim the American Opportunity Tax Credit, you have to prove you actually paid the tuition and it wasn't all covered by tax-free scholarships.

• Form 1098-T: Your school usually makes this available in your student portal by late January.

• The "Hidden" Receipts: The 1098-T often leaves out books, equipment, and required supplies. Gather your receipts from Amazon, the campus bookstore, or tech retailers to maximize this credit.

3. For Head of Household (HoH) Status

This status gives you a higher standard deduction, so the IRS is very strict about it. You must prove you paid for more than half the cost of keeping up a home.

• Proof of Residency: A utility bill (water, electric, gas) or a lease agreement dated in 2025.

• Financial Responsibility: It must be in your name. If the bills are in someone else's name, you generally cannot claim HoH.