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Archive for Milton Boothe

The Exclusion Amount Of The Gain From The Sale Of Your Main Home

Milton-Boothe-1-22-16

If you sold your home during the year and made a gain, you may be able to exclude all of that gain from your taxable income. To qualify for this tax benefit, the home sold must have been your principal residence. You can exclude from your taxable income, the gain from the sale of your main home, of up to $250,000 ($500,000 if filing a joint return). To qualify for this exclusion, however, all of the following must be true:

• You owned the home for at least 2 of the last 5 years (the ownership test).
• You lived in the home as your main home for at least 2 of the last 5 years (the use test).
• You did not exclude gain from the sale of another home during the 2-year period ending on the date of the sale. Read more

Tax Preparation Questions To Ask Yourself

Milton Boothe

When you leave your tax preparer’s office each year, there are two very important questions you should probably be asking yourself.

Question #1:

How secure is your personal information after you leave it with your tax preparer? Probably not very secure! Do they leave your paperwork lying about the place, accessible to all, after they have completed your taxes? Are their computers adequately protected by firewalls and effective anti-virus software? Is there adequate background checks done on their employees, who obviously will have unlimited access to your sensitive personal information? The honest truth is that you really don’t know.

Also, you should be concerned about hackers. These criminals have been successful in hacking into supposedly very secure government computer systems; the Office of Personnel Management, and even the IRS itself come to mind immediately. These people know that they will have access to a treasure trove of personal information if they were to hack into the computers of H&R Block, Liberty Tax, or any CPA or other tax preparation office. So what is to stop them from hacking into your tax preparer’s computer, which obviously will be a lot less protected than the government’s computers? Read more

Premium Tax Credit Eligibility & Determining Factors

Milton Boothe

To be eligible for the Premium Tax Credit under the Affordable Care Act, all of the following must apply:

• Your income must be between 100% and 400% of Federal Poverty Line (see below) for a given family size.

• You cannot be claimed as a dependent.

• If married, you must file a joint return (although some exceptions may apply).

• You must be enrolled in a qualified health plan through Marketplace.

• Cannot be eligible for other minimum essential coverage.

• Premiums must be paid.

Read more

Form 1095-C – Employer-Provided Health Insurance Offer and Coverage

Milton Booth - TaxConnections

Under the Affordable Care Act, the IRS will be implementing a number of new forms. One such form is the 1095-C form, which will be completed by employers, and which will become mandatory for tax year 2015.

Employers with 50 or more full-time employees are required to file Form 1095-C, both with the employee and with the IRS.

This form includes information about whether the employer offered qualifying health coverage to the employee, spouse and dependents, for some or all months during the year.

Form 1095-C provides the following information:

Part I
• Employee’s name, SSN, address. Read more

Are You Eligible For The Premium Tax Credit?

TaxConnections Member Milton Boothe

The Premium Tax Credit, under the Affordable Care Act, is a refundable tax credit that helps eligible people with moderate incomes afford health insurance purchased through the Health Insurance Marketplace.

If you are eligible for the credit, you can choose to:

• Get it now: Have some or all of the estimated credit paid in advance on your behalf directly to your insurance company, to lower what you pay out-of-pocket for your monthly premiums during 2015. These payments are called advance payments of the premium tax credit.

OR

• Get it later: Wait to get the credit when you file your 2015 tax return in 2016. This means, then, that no Read more

How To Qualify For IRS Uncollectible (Hardship) Status, If You Are Unable To Pay Your Tax Bill

TaxConnections Member Milton Boothe

If you owe the IRS, and are unable to settle your tax bill because you do not have the resources to do so; don’t panic, there might be a way out – the IRS could declare you “Uncollectible.”

In order to be declared uncollectible by the IRS you will have to prove to them that if they were to collect the tax owed to them it would create unfair economic hardship for you. The IRS doesn’t necessarily have a set formula for declaring individuals uncollectible, and will consider each person on a case by case basis; so there is no guarantee, but it’s worth a try.

The IRS will evaluate individuals to see if further collection of taxes from them would create economic hardship, and will probably look at a specific factor or a number of factors combined to determine if you indeed qualify for this Read more

Qualify For Affordable Care Act Exemptions – 2015 Tax Year

TaxConnections Member Milton Boothe

Under the Affordable Care Act, the law requires you and each member of your family to have qualifying health insurance, called minimum essential coverage, otherwise you will be subject to a penalty when you file your federal income tax return.

It is important to note that you may be exempt from the requirement to maintain minimum essential coverage, if certain conditions are met, and thus will NOT have to make a shared responsibility payment (penalty) when you file your federal income tax return.

You can obtain some exemptions only from the marketplace, others only from the IRS, and yet others from either the Marketplace or the IRS.

You can obtain Affordable Care Act exemptions under the ACA if any of the following apply to you for 2015 tax year: Read more

How Secure Is Your Sensitive Personal Information After You Leave It With Your Tax Preparer?

Milton Boothe-9-28-15

Probably not very secure! Do they leave your paperwork lying about the place, accessible to all, after they have completed your taxes? Are their computers adequately protected by firewalls and effective anti-virus software? Is there adequate background checks done on their employees, who obviously will have unlimited access to your sensitive personal information? The honest truth is that you really don’t know.

Also, you need to be really concerned about hackers. These criminals have been successful in hacking into supposedly very secure government computer systems; the Office of Personnel Management, and even the IRS itself come to mind immediately. These people know that they will have access to a treasure trove of personal information if they were to hack into the computers of H&R Block, Liberty Tax, or any CPA or other tax Read more

Are Lower Income Taxpayers Taking Full Advantage Of The Earned Income Credit?

Milton Boothe-9-24-15

The earned income credit (EIC) is a major tax credit that is specifically designed for lower income working families and individuals. The amount of the credit varies depending on your level of income and how many dependents you support. You can claim this credit with or without qualifying children, but greater tax credit is given to those who have qualifying children. This credit can be valued at over $6,000 if you have three or more qualifying children. The earned income credit is a refundable credit, which means that you will receive a tax refund whether or not you had any taxable income.

As the name implies, the earned income credit is provided as an incentive for individuals to work. Consequently, to qualify for this credit, you must have some form of earned income during the year. Earned income includes wages you get from working, and Read more

Claiming The Credit for Child and Dependent Care Expenses

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You may be able to claim a credit for child and dependent care, if you pay someone to care for your dependent child who is under the age of 13, or for your spouse or other dependent who is not able to care for himself or herself. You must have incurred this expenditure so that you (and your spouse, if you are married) could work or look for work. If you are married, both you and your spouse must have some form of earned income, unless one spouse either was a full-time student for 5 months of the tax year, or was physically or mentally incapable of self-care.

The child and dependent care credit, which is a nonrefundable credit, is generally a percentage of the amount of the work-related child and dependent care expenses you paid to a care provider. The amount of this percentage depends on your adjusted gross Read more

Claiming The Additional Child Tax Credit

Child Tax Credit - Milton Boothe

If you cannot claim the entire amount of your child tax credit because it exceeds your tax, don’t be discouraged, because you may be able to claim the unused portion as an additional child tax credit. The additional child tax credit is a refundable credit, and is available to you whenever you cannot claim the entire amount of the child tax credit.

The amount of the refund, however, may differ depending on your total earned income. It may also be affected by the amount of Social Security and Medicare taxes that were paid.

Figuring and Claiming the Credit:

The amount of the additional child tax credit that you can claim on your income tax is the lower of: Read more

Claiming The Child Tax Credit

Milton Boothe

The child tax credit is a credit given for each dependent child on your tax return, who is under the age of 17 at the end of the tax year. The child tax credit is a nonrefundable credit, and is intended to provide an extra measure of tax relief for taxpayers with qualifying children.
To qualify for this credit, you must have a qualifying child on your tax return. The rules for determining if your child is a qualifying child for the purpose of this credit are as follows:

• The child must be your son, daughter, adopted child, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them. (This includes your niece, nephew, grandchild, great-grandchild, etc.)
• The child must not provide for over half of his or her own support for the year. Read more

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