- an increase or decrease in your income
- marriage or divorce
- the birth or adoption of a child
- starting a job with health insurance
- gaining or losing your eligibility for other health care coverage
- changing your residence
Friday, July 24, 2015
If you have insurance through the Health Insurance Marketplace, you may be getting advance payments of the premium tax credit. These are paid directly to your insurance company to lower your monthly premium. Changes in your income or family size may affect your premium tax credit. If your circumstances have changed, the time is right for a mid-year checkup to see if you need to adjust the premium assistance you are receiving. You should report changes that have occurred since you signed up for your health insurance plan to your Marketplace as they occur.
Changes in circumstances that you should report to the Marketplace include:
To estimate the effect that changes in your circumstances may have upon the amount of premium tax credit that you can claim - see this change in circumstances estimator.
Reporting the changes will help you avoid getting too much or too little advance payment of the premium tax credit. Getting too much means you may owe additional money or get a smaller refund when you file your taxes. Getting too little could mean missing out on premium assistance to reduce your monthly premiums.
Repayments of excess premium assistance may be limited to an amount between $300 and $2,500 depending on your income and filing status. However, if advance payments of the premium tax credit were made, but your income for the year turns out to be too high to receive the premium tax credit, you will have to repay all of the payments that were made on your behalf, with no limitation. Therefore, it is important that you report changes in circumstances that may have occurred since you signed up for your plan.
Changes in circumstances also may qualify you for a special enrollment period to change or get insurance through the Marketplace. In most cases, if you qualify for the special enrollment period, you will have sixty days to enroll following the change in circumstances. You can find Information about special enrollment at HealthCare.gov./
Friday, July 17, 2015
It can be hard to understand taxes. It can be much harder if English is not your first language. The IRS provides many free products and services in Spanish on IRS.gov/espanol. Here are some tips on tax help “en Español” that you can get from the IRS this summer:
- Get answers 24/7. You can access IRS.gov/espanol at any time. It offers tax help to both individuals and businesses. You can even get help in Spanish for some specific types of work. This includes tax centers for agricultural workers and truckers. If you’re facing financial difficulty, visit “Centro Tributario para Asistir a Contribuyentes Desempleados.”
- Get tax forms and publications. View and download several tax forms and publications in Spanish from IRS.gov/espanol.
- Check out IRS2Go. The free IRS app is available in English and Spanish. Use it with an iPhone, iPad or Android mobile device. With IRS2Go you can:
- Get your refund status.
- Watch IRS YouTube videos.
- Get tax news updates.
- Follow the IRS.
- Get health care tax information. The IRS website also has information about the Affordable Care Act tax provisions in bothEnglish and Spanish to educate individuals and businesses on how the health care law may affect them. The pages provide information about tax provisions that are in effect now and those that will go into effect in the future. Visitors will find information about the law and its provisions, legal guidance, the latest news, frequently asked questions and links to additional resources.
- Use IRS online tools. Check the status of your refund through¿Dónde está mi reembolso?” Use the “Asistente EITC” tool to find out if you’re eligible for the Earned Income Tax Credit.
- Get the latest on new tax laws. You can get the most up-to-date information on tax law changes by typing “Noticias en Español” in the IRS.gov search box. Don’t forget to sign up to get Spanish tax tips by email.
- Connect with the IRS on Twitter. Get the latest IRS tax news and information in Spanish through Twitter @IRSenEspanol.
- Get tips at the Multimedia Center. Video tax tips and audio podcasts on various IRS topics are available in English and Spanish. Search using the keywords “Centro Multimediático.”
Remember that the official IRS website address is IRS.gov. Don’t be fooled by sites that end in .com, .net, .org or any ending other than .gov.
Thursday, July 16, 2015
Organize your finances
If you’re super organized, you’ve marked and filed every receipt since January and carefully tracked your year-to-date income and expenses. You may even know exactly where your taxes currently stand. The rest of us may have some catching up to do, but rest assured, it’s not difficult to get started. It’s as simple as doing a little sorting, throwing out things we don’t need, filing, and updating your financial records.
Tackling several months’ worth now will be much easier than waiting until you have a full year’s worth of records later. Plus, you’re much more likely to remember details about expenses and other items now versus next year.
Review your income tax withholding
Whether you owed a large tax bill or got a big refund on last year’s income tax return now is a good time to review and adjust your income tax withholding if you want a different result when you file next year. Generally, you need more exemptions to have less tax withheld, and fewer exemptions to have more tax withheld.
Keep up with estimated taxes
If you own a business or have substantial income that isn’t subject to income tax withholding, you may need to pay quarterly estimated taxes. The estimated taxes for the third and fourth quarters of the year are due before the quarters are even over – on September 15 for the third quarter, and January 15 for the fourth quarter.
As many self-employed can attest, it can be hard to come up with the money for estimated taxes every quarter. However, it can be even harder to pay the entire amount as a lump sum at tax time, plus any applicable penalties and interest. The best way to keep up with taxes on self-employment and other income is to put it in a designated bank account as the money comes in, or at least once a month.
Remember your summer child care tax benefits
If you work and send your child under age 13 to daycare this summer, you may qualify for the Child and Dependent Care Credit. Whether your child goes to an actual daycare, day camp or are babysat at someone’s home, you may be eligible for the credit. Just keep in mind that in most cases, you cannot take a credit if you send your child to tutoring or to a camp away from home.
Parents who don’t work but are attending school or looking for a job may also qualify for the credit. Be sure to save applicable child care receipts because the credit can reduce your taxes by up to 35 percent of the amount you spend.
Have your kids work for your business
One advantage to owning a business is that you can give your own kids a job. If there’s something they can do to help, you can pay them and deduct their wages. If your kids are under the age of 18, you don’t even have to bother with Social Security and Medicare taxes. Your kids are subject to paying tax on their earnings, but they are almost certainly in a lower income tax bracket than you are. In fact, if they’re just working a few hours in the summer, they probably won’t owe any tax on their earnings.
Make energy-efficient home improvements
Summer is a great time to be outside and to make your house more efficient for the colder days to come. Check with your power company to see if it offers free energy audits. You might also do some research to learn about cost-effective ways to save energy this fall and winter. If you buy certain energy efficient items such as solar hot water heaters, solar electric equipment, and small wind turbines to name a few, you may qualify for a tax credit.
The credit is 30 percent of the amount you spend, including the costs of on-site preparation and installation at your home in the United States. Track and file all applicable receipts now so you’re ready to complete IRS Form 5695 to claim your credit come tax time.
(From TaxAct website by sally herigstad)
Wednesday, July 15, 2015
If you are in the U. S. Armed Forces, special tax breaks may apply to you. For example, some types of pay are not taxable. Certain rules apply to deductions or credits that you may be able to claim that can lower your tax. In some cases, you may get more time to file your tax return. You may also get more time to pay your income tax. Here are the top 10 IRS tax tips about these rules:
- Deadline Extensions. Some members of the military, such as those who serve in a combat zone, can postpone some tax deadlines. If this applies to you, you can get automatic extensions of time to file your tax return and to pay your taxes.
- Combat Pay Exclusion. If you serve in a combat zone, certain combat pay you get is not taxable. You won’t need to show the pay on your tax return because combat pay is not part of the wages reported on your Form W-2, Wage and Tax Statement. If you serve in support of a combat zone, you may qualify for this exclusion.
- Earned Income Tax Credit or EITC. If you get nontaxable combat pay, you can include it to figure your EITC. Doing so may boost your credit. Even if you do, the combat pay stays nontaxable.
- Moving Expense Deduction. You may be able to deduct some of your unreimbursed moving costs. This applies if the move is due to a permanent change of station.
- Uniform Deduction. You can deduct the costs of certain uniforms that you can’t wear while off duty. This includes the costs of purchase and upkeep. You must reduce your deduction by any allowance you get for these costs.
- Signing Joint Returns. Both spouses normally must sign a joint income tax return. If your spouse is absent due to certain military duty or conditions, you may be able to sign for your spouse. In other cases when your spouse is absent, you may need a power of attorney to file a joint return.
- Reservists’ Travel Deduction. If you’re a member of the U.S. Armed Forces Reserves, you may deduct certain costs of travel on your tax return. This applies to the unreimbursed costs of travel to perform your reserve duties that are more than 100 miles away from home.
- ROTC Allowances. Some amounts paid to ROTC students in advanced training are not taxable. This applies to allowances for education and subsistence. Active duty ROTC pay is taxable. For instance, pay for summer advanced camp is taxable.
- Civilian Life. If you leave the military and look for work, you may be able to deduct some job search expenses. You may be able to include the costs of travel, preparing a resume and job placement agency fees. Moving expenses may also qualify for a tax deduction.
- Tax Help. Most military bases offer free tax preparation and filing assistance during the tax filing season. Some also offer free tax help after .
For more, refer to Publication 3, Armed Forces’ Tax Guide. It is available onIRS.gov/forms at any time.
Additional IRS Resources:
- Questions & Answers on Combat Zone Tax Provisions
- Publication 521, Moving Expenses
- Publication 529, Miscellaneous Deductions
IRS YouTube Videos:
- Military Tax Tips – English | Spanish | ASL
- Combat Pay – English | Spanish
- Moving Expenses – English | Spanish | ASL
- Job Search Expenses – English | ASL
Tuesday, July 14, 2015
Even though you filed an extension of the time to file your 2014 Federal income tax return, do not wait until the October 15 extended deadline to maintain your eligibility for Affordable Care Act Premium Tax Credit Advanced Payments. If you received advance payments of the premium tax credit in 2014 under thehealth care law, you should file your 2014 tax return as soon as possible this summer to ensure you can timely receive advance payments next year from your Marketplace.
If advance payments of the premium tax credit were paid on behalf of you or an individual in your family in 2014, and you do not file a 2014 tax return, you will not be eligible for advance payments of the premium tax credit or cost-sharing reductions to help pay for your Marketplace health insurance coverage in 2016. This means you will be responsible for the full cost of your monthly premiums and all covered services. In addition, we may contact you to pay back some or all of the 2014 advance payments of the premium tax credit.
Because Marketplaces will determine eligibility for advance tax credit payments and cost-sharing reductions for the 2016 coverage year this fall, it will substantially increase your chances of avoiding a gap in receiving this help if you file your 2014 tax return with Form 8962 electronically as soon as possible.
If you missed the deadline or received an extension to file until , you should file your return as soon as possible. You should not wait to file. File now to reconcile any advance credit payments you received in 2014 and to maintain your eligibility for future premium assistance.
Remember that filing electronically is the best and simplest way to file a complete and accurate tax return as it guides you through the process and does all the math.
IRS Tax Tips: HCTT-2015-40
Monday, July 13, 2015
Each year the IRS mails millions of notices and letters to taxpayers. If you receive a notice from the IRS, here is what you should do:
- Don’t Ignore It. You can respond to most IRS notices quickly and easily. It is important that you reply right away. If you feel comfortable doing this yourself, great. If not, this is a good time to contact a tax professional and ask that person to contact the IRS for you.
- Focus on the Issue. IRS notices usually deal with a specific issue about your tax return or tax account.Understanding the reason for your notice is important before you can comply.
- Follow Instructions. Read the notice carefully. It will tell you if you need to take any action to resolve the matter. You should follow the instructions. Keep a copy of the notice you get from the IRS with your tax records.
- Correction Notice. If it says that the IRS corrected your tax return, you should review the information provided and compare it to your tax return.
If you agree, you don’t need to reply unless a payment is due.
If you don’t agree, it’s important that you respond to the IRS. Write a letter that explains why you don’t agree. Make sure to include information and any documents you want the IRS to consider. Include the bottom tear-off portion of the notice with your letter. Mail your reply to the IRS at the address shown in the lower left part of the notice. Allow at least 30 days for a response from the IRS.
- Premium Tax Credit. The IRS may send you a letter asking you to clarify or verify your premium tax credit information. The letter may ask for a copy of your Form 1095-A, Health Insurance Marketplace Statement. You should follow the instructions on the letter that you receive. This will help the IRS verify information and issue the appropriate refund.
- No Need to Visit IRS. You can handle most notices without calling or visiting the IRS. If you do have questions, call the phone number in the upper right corner of the notice. You should have a copy of your tax return and the notice with you when you call.
- Watch Out for Scams. Don’t fall for phone and phishing email scams that use the IRS as a lure. The IRS first contacts people about unpaid taxes by mail – not by phone. The IRS does not initiate contact with taxpayers by email, text or social media
- Contact me if you have any questions. If you do not wish to contact the IRS yourself, please contact me for a consultation to see if I am able to help you resolve your issue. Please DO NOT IGNORE IRS NOTICES.
Additional IRS Resources:
- Tax Topic 651 – Notices – What to Do
- Tax Topic 653 – IRS Notices and Bills, Penalties and Interest Charges
- Understanding Your CP2000 Notice
IRS Summertime Tax Tip 2015-05
Saturday, July 11, 2015
The Taxpayer Advocate Service has developed several tools for individuals and employers to assist in estimating their ACA related credits and payments. Because these tools provide only an estimate, you should not rely upon them as an accurate calculation of the information you will report on your tax return. You should use these estimators only as a guide to assist you in making decisions regarding your tax situation.
The Premium Tax Credit Change Estimator can help you estimate how yourpremium tax credit will change if your income or family size changes during the year. This estimator tool does not report changes in circumstances to your Marketplace. To report changes and to adjust the amount of your advance payments of the premium tax credit you must contact your Health Insurance Marketplace. Be sure to report all changes directly to that Marketplace because they can affect both your coverage and your final credit when you file your federal tax return.
The Individual Shared Responsibility Payment Estimator can help you estimate the amount you may have to pay if you did not have minimum essential coverage during the year. This tool can only provide an estimate of your individual shared responsibility payment. To determine the payment when you file your tax return, use the Shared Responsibility Payment Worksheet in the instructions for Form 8965.
The Small Business Health Care Tax Credit Estimator can help you determine if you might be eligible for the Small Business Health Care Tax Credit and how much credit you might receive. This tool provides you with an estimate for tax year 2014 and beyond. However, some figures used in determining the credit are indexed for inflation. Because of this, for future years, the estimator cannot provide a detailed estimate.
By clicking on these links, you will enter the Taxpayer Advocate Service website. The Taxpayer Advocate Service created, operates, and maintains this website and is solely responsible for the content.
The calculations provided by the TAS Estimator Tools are only estimates and may not match the actual credits or payments you will report on your tax return. IRS cannot validate the accuracy of the estimator calculations for your specific circumstance.
TAS is an independent organization within the IRS whose job is to ensure every taxpayer is treated fairly and that taxpayers know and understand their rights.
Thursday, July 9, 2015
If you rent a home to others, you usually must report the rental income on your tax return. However, you may not have to report the rent you get if the rental period is short and you also use the property as your home. In most cases, you can deduct your rental expenses. When you also use the rental as your home, your deduction may be limited. Here are some basic tax tips that you should know if you rent out a vacation home:
- Vacation Home. A vacation home can be a house, apartment, condominium, mobile home, boat or similar property.
- Schedule E. You usually report rental income and rental expenses on Schedule E, Supplemental Income and Loss. Your rental income may also be subject to Net Investment Income Tax.
- Used as a Home. If the property is “used as a home,” your rental expense deduction is limited. This means your deduction for rental expenses can’t be more than the rent you received. For more about these rules, see Publication 527, Residential Rental Property (Including Rental of Vacation Homes).
- Divide Expenses. If you personally use your property and also rent it to others, special rules apply. You must divide your expenses between the rental use and the personal use. To figure how to divide your costs, you must compare the number of days for each type of use with the total days of use.
- Personal Use. Personal use may include use by your family. It may also include use by any other property owners or their family. Use by anyone who pays less than a fair rental price is also personal use.
- Schedule A. Report deductible expenses for personal use onSchedule A, Itemized Deductions. These may include costs such as mortgage interest, property taxes and casualty losses.
- Rented Less than 15 Days. If the property is “used as a home” and you rent it out fewer than 15 days per year, you do not have to report the rental income. In this case you deduct your qualified expenses on schedule A.
- Use IRS Free File. If you still need to file your 2014 tax return, you can use IRS Free File to make filing easier. Free File is available until . If you make $60,000 or less, you can use brand-name tax software. If you earn more, you can use Free File Fillable Forms, an electronic version of IRS paper forms. Free File is available only through the IRS.gov website.
You can get forms and publications on IRS.gov/forms at any time.
Additional IRS Resources available at IRS.gov :
- Tax Topic 415 – Renting Residential and Vacation Property
- Rental Income and Expenses – Real Estate Tax Tips
IRS YouTube Videos:
IRS Podcasts available at IRS.gov :
Monday, July 6, 2015
If you play the ponies, play cards or pull the slots, your gambling winnings are taxable. You must report them on your tax return. If you gamble, these IRS tax tips can help you at tax time next year:
1. Gambling income. Income from gambling includes winnings from the lottery, horse racing and casinos. It also includes cash and non-cash prizes. You must report the fair market value of non-cash prizes like cars and trips.
2. Payer tax form. If you win, the payer may give you a Form W-2G, Certain Gambling Winnings. The payer also sends a copy of the W-2G to the IRS. The payer must issue the form based on the type of gambling, the amount you win and other factors. You’ll also get a form W-2G if the payer must withhold income tax from what you win.
3. How to report winnings. You normally report your winnings for the year on your tax return as “Other Income.” You must report all your gambling winnings as income. This is true even if you don’t receive a Form W-2G.
4. How to deduct losses. You can deduct your gambling losses onSchedule A, Itemized Deductions. The amount you can deduct is limited to the amount of the gambling income you report on your return.
5. Keep gambling receipts. You should keep track of your wins and losses. This includes keeping items such as a gambling log or diary, receipts, statements or tickets.
See Publications 525, Taxable and Nontaxable Income for rules on this topic. Refer to Publication 529, Miscellaneous Deductions for more on losses. It also lists some of the types of records you should keep. You can download and view both on IRS.gov/forms at any time.
Additional IRS Resources:
- Tax Topic 419, Gambling Income and Expenses
IRS YouTube Videos: