Millions of Americans forgo critical tax relief each year by failing to claim the Earned Income Tax Credit (EITC), a federal tax credit for individuals who work but do not earn high incomes. Taxpayers who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund.
Last year, an estimated 21 million taxpayers received approximately $37.5 billion in EITC. However, the IRS estimates Read More
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.
On December 18th of 2015, President Obama discussed a Legislative Tax Update on Capitol Hill. He signed into law a sweeping $1.14 trillion dollar funding bill that will keep the federal government operating through September 30th of 2016. In connection to the tax aspects of this comprehensive and pivotal legislation, the Protecting Americans from Tax Hikes Act of 2015 (hereinafter the “PATH Act”) does considerably more than the typical tax-extenders legislation passed in previous years and truly signifies a dynamic paradigm shift as the PATH Act makes permanent over twenty leading tax incentives, including the Research & Development Tax Credit Program, the American Opportunity Tax Credit Program and the enhanced I.R.C. § 179 Expensing Program. The PATH Act further extends other key tax incentives, including the Bonus Depreciation Program and the New Markets Tax Credit Program for five years while reinstating other significant tax incentives for two years. The PATH Act also imposes a two-year suspension on the ACA Medical Device Excise Tax.
The subsequent synopsis will serve as a practical overview of just some of the many far-reaching changes enacted by the PATH Act affecting both business entities and individuals including, but certainly not limited to: Read More
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
The code includes a number of benefits for individuals with disabilities, but you can’t take advantage of these benefits unless you know about them and understand how they might benefit you and your special circumstances. Many of the benefits also apply to the parents of children with disabilities. Here is a rundown:
ABLE Accounts – Under tax law, states can offer specially designed, tax-favored ABLE accounts to people with disabilities who became disabled before age 26.
Recognizing the special financial burdens faced by families raising children with disabilities, ABLE accounts are designed to enable people with disabilities, who became disabled before age 26, and their families to save for and pay for disability-related Read More
On September 22 of 2015, Senate Democrats introduced a comprehensive energy reform bill entitled “The American Energy Innovation Act” that would reform current energy policy and enhance over forty tax incentives subsidizing energy production.
The legislation addresses the need for the creation of new energy based jobs in connection to both infrastructure advancements and technological innovation. As a synopsis, the bill includes programs essential to renewed economic growth in the energy sector that empower consumers; modernize infrastructure; cut carbon pollution and waste; invest in clean energy; and support research and development initiatives.
The tax aspects of the legislation would modify several energy tax incentives already in Read More
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
Through 2016, taxpayers can get a tax credit on their federal tax return equal to 30% of the costs for installing certain power-generating systems on their homes. The credit is non-refundable, which means it can only be used to offset a taxpayer’s current tax liability, but any excess can be carried forward to offset tax through 2016.
Systems that qualify for the credit include the following:
• Solar water heating system – Qualifies if used in a dwelling unit used by the taxpayer as a main or second residence where at least half of the energy used by the property for such purposes is derived from the sun. Heating water for swimming pools or hot tubs does not qualify for the credit. The property must be certified for performance by the Solar Read More
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
Confused about which credits and deductions you can claim on your 2014 tax return? You’re not alone. Here are six tax breaks that you won’t want to overlook.
Thanks to last-minute tax extender legislation passed last December taxpayers filing their 2014 returns can still deduct either state income tax paid or state sales tax paid, whichever is greater.
Here’s how it works. If you bought a big ticket item like a car or boat in 2014, it might be more advantageous to deduct the sales tax, but don’t forget to figure any state income taxes withheld from your paycheck just in case. If you’re self-employed, you can include Read More
A few people have already pointed out this oddity in the Affordable Care Act including National Taxpayer Advocate Nina Olson in her 2013 Annual Report to Congress. Her excerpt notes that in determining if a person had affordable health coverage available to them from an employer, the measure is whether the self-only lowest cost coverage available to the employee costs 8% or less. It doesn’t matter if the family coverage offered by the employer is affordable. The relevance is that the family members won’t qualify for a Premium Tax Credit.
That seems odd if no “affordable” coverage was offered to the rest of the family. Isn’t that the point of the Affordable Care Act? To help make coverage affordable to everyone? Read More
The Research and Experimentation Tax Credit (hereinafter “RTC”) was added to the Internal Revenue Code (hereinafter “the Code”) in 1981 as a temporary provision of the Code at a time when research and development based jobs were significantly declining in the United States due to these jobs being moved overseas where labor rates and overall operating costs were considerably less. For this very reason, the RTC was introduced into the Code in 1981 to motivate business entity taxpayers to incur significant and qualifying research and development expenditures with the high expectations that such an advantageous tax incentive would facilitate in stimulating job growth and investment in the United States and Read More
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