I had a grEAt conversation with my friend Bob Kerr Friday. We talked about the Department of the Treasury expanding the relief it announced previously on February 24, which will mitigate any harm to tax filers in regards to filing Form 1095A under the Affordable Care Act.
Basically, if you enrolled in Marketplace coverage, received an incorrect Form 1095-A, and filed your return based on that form, you do not need to file an amended tax return.
Additional points Bob brought up include:
• The IRS will not pursue the collection of any additional taxes from you based on updated information in the corrected forms. This relief applies to tax filers who enrolled through the Read More
Since 1975, the Earned Income Tax Credit has helped workers with low and moderate incomes get a tax break each year. Four out of five eligible workers claim EITC. Wondering if you can too? Here’s what you should know about this valuable credit:
1. Review your eligibility. If you worked and earned under $52,427 in 2014, you may qualify for the EITC. If your financial or family situation has changed, you should review the EITC eligibility rules because you might qualify for the EITC this year even if you didn’t in the past. If you qualify for the EITC you must file a federal income tax return and claim the credit to get it. This is true even if you are not otherwise required to file a tax return.
2. Know the rules. Before you claim the EITC, you need to understand the rules to be sure Read More
March 31 – 11:00AM (CDT) – Click To Register
TaxConnections and ACPEN offer The Tangible Property Webinar.
The Tangible Property Regulations went into effect on January 1, 2014. On February 13, 2015, the IRS released the “repair regs” under Rev. Proc. 2015-20. These were billed as providing relief for small taxpayers struggling with the tangible property regulations. However, as with most attempts to help taxpayers this “relief” is a mixed blessing for some taxpayers. Learn how, as a practical matter, availing oneself of the processes contained in Rev. Proc. 2015-20 could cause the taxpayer to miss out on important tax savings. ACPEN’s expert practitioners will explain the practical impact of under the repair regulations. Both practitioners and taxpayers need to be wary of the possible traps of Read More
Why do so many people choose them over traditional IRAs?
The IRA that changed the whole retirement savings perspective. Since the Roth IRA was introduced, it has become a fixture in many retirement planning strategies.
The key argument for going Roth can be summed up in a sentence: Paying taxes on your retirement contributions today is better than paying taxes on your retirement savings tomorrow.
Here is a closer look at the trade-off you make when you open and contribute to a Roth IRA – a trade-off many savers are happy to make. Read More
From time-to-time, nonprofit organizations may be donated a vehicle, boat, or airplane as a charitable contribution. The IRS realized that this was an area in which taxpayers were abusing the law, often taking a deduction far in excess of the actual value of the vehicle being donated. For example, in one instance a vehicle was ready for the junk pile but the donor gave it to a charitable organization. Based on the Kelley Blue Book Value it had a fair market value of $1,200, which the donor used as a charitable contribution deduction on his Form 1040. So several years ago, more restrictive rules were put in place in regard to the amount that may be deducted as a charitable contribution.
The long-standing rule for non-cash charitable contributions states that any such contribution valued in excess of $500 must be reported on Form 8283 and included Read More
Don’t wait around for a paper check. Have your federal (and state, if applicable) tax refund deposited directly into your bank account. Selecting Direct Deposit is a secure and convenient way to get your money into your pocket more rapidly.
Speed – When combining e-file with direct deposit, the IRS will likely issue your refund in no more than 21 days.
Security – Direct deposit offers the most secure method of obtaining your refund. There is no check to lose. Each year, the U.S. Post Office returns thousands of refund checks to the IRS as undeliverable mail. Direct deposit eliminates undeliverable mail and is also the best way to guard against having a tax refund check stolen. Read More
This year, there are some changes to tax forms related to the Affordable Care Act. Along with several new lines on existing forms, there are also two new forms that need to be included with some tax returns.
While most taxpayers simply need to check a box on their tax return to indicate they had health coverage for all of 2014, there are new lines on Forms 1040, 1040A, and 1040EZ related to the health care law. Information about the new forms and updates to existing forms is summarized below
Form 8965, Health Coverage Exemptions
Complete this form to report a Marketplace-granted coverage exemption or claim an Read More
If you’re like most taxpayers, you find yourself with an ominous stack of “homework” around TAX TIME! Pulling together the records for your tax appointment is never easy, but the effort usually pays off in the extra tax you save! When you arrive at your appointment fully prepared, you’ll have more time to:
• Consider every possible legal deduction;
• Evaluate which income reporting and deductions are best suited to your situation;
• Explore current law changes that affect your tax status;
• Talk about tax-planning alternatives that could reduce your future tax liability.
Choosing Your Best Alternatives
I was shocked by the March 13, 2015 IRS release warning individuals to chose their tax professional carefully. The IRS found that some “unscrupulous preparers” instructed their clients to make individual shared responsibility payment directly to the preparer! That is stealing!
I fault the clients, preparers and the complex system.
The IRS has tried to regulate all return preparers but been held up by a need for a statute change that Congress will have to address (see quick summary from IRS on this). Of course, truly unscrupulous people will still find a way around the law.
So, more is needed to educate individuals about the tax system so they better understand Read More
Nontaxable or tax exempt income is income that is not subject to income tax, and you do not report these on your tax return. Surprisingly to some taxpayers, there are quite a number of income sources that are actually nontaxable, and these include the following:
• Child support.
• Federal tax refunds.
• Interest on state or local government obligations, such as municipal bonds.
• Welfare and other public assistance benefits.
• Workers’ compensation and similar payments for sickness and injury.
• Meals and lodgings provided by your employer. These will be excluded from your taxable income if: (a) the meals are furnished on your employer’s business premises, (b) the Read More
IRS impersonation phone scams, as well as phishing continue to be a serious threat to taxpayers topping the list of the IRS “Dirty Dozen” tax schemes once again.
The IRS impersonation phone scam has claimed nearly 3,000 victims who have collectively paid over $14 million, the Treasury Inspector General for Tax Administration recently warned.
Phishing email scams continue to be pervasive as well. Illegal scams such as these can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them. Read More