THE DEADLINE IS HERE FOR ISSUING FORM 1099-MISC TO RECIPIENTS

As a general rule, a business must issue a Form 1099-MISC to each person to whom it at least $600 in rents, services (including parts and materials), or other income payments. You do not  issue 1099s for payments made for personal purposes.

A business must send a copy of Form 1099-Misc to the recipient by February 1, 2016.

THERE IS STILL TIME TO ISSUE FORM 1099-MISC if you contact me immediately.

For questions and last minute Form 1099-Misc filing, email me at lancewgurel@gmail.com

The Earned Income Tax Credit: You MUST File a Tax Return to Receive the EITC

The Earned Income Tax Credit has helped workers with low and moderate incomes get a tax break for 40 years. Yet, one out of every five eligible workers fails to claim it. Here are some things you should know about this valuable credit:

• Review Your Eligibility. If you worked and earned under $53,267, you may qualify for EITC. If your income or family situation has changed, you should review the EITC eligibility rules. You might qualify for EITC this year even if you didn’t in the past. If you qualify for 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. Don’t guess about your EITC eligibility. Use the EITC Assistant tool on IRS.gov. The tool can help you find out if you qualify for the credit. It can also estimate the amount of your EITC.
• Know the Rules. You need to understand the rules before you claim the EITC, to be sure you qualify. It’s important that you get this right. Here are some factors you should consider:

o If you are married and file a separate return you do not qualify for EITC.

o You must have a Social Security number that is valid for employment for yourself, your spouse, if married, and any qualifying child listed on your tax return.

o You must have earned income. Earned income includes earnings from working for someone else or working for yourself.

o You may be married or single, with or without children to qualify. If you don’t have children, you must also meet age, residency and dependency rules. If you have a child who lived with you for more than six months of 2015, the child must meet age, residency, relationship and the joint return rules to qualify.

o If you are a member of the U.S. Armed Forces serving in a combat zone, special rules apply.

• Lower Your Tax or Get a Refund. If you qualify for EITC, you could pay less federal tax, no tax or even get a refund. EITC could be worth up to $6,242. The average credit was $2,447 last year.

For more on EITC, see IRS Publication 596, Earned Income Credit. It’s available in English and Spanish on IRS.gov.

From IRS

Six Tips about Individual Shared Responsibility Payments

For any month during the year that you or any of your family members don’t have minimum essential coverage and don’t qualify for a coverage exemption, you are required to make an individual shared responsibility payment when you file your tax return.

Here are six things to know about this payment:   

• You are not required to make a payment if you had coverage or qualify for an exemption for each month of the year.
• If you did not have coverage and your income was below the tax filing threshold for your filing status, you qualify for a coverage exemptionand you should not make a payment.
• If you are not a U.S. citizen or national, and are not lawfully present in the United States, you are exempt from the individual shared responsibility provision and do not need to make a payment. For this purpose, an immigrant with Deferred Action for Childhood Arrivals status is considered not lawfully present and therefore is exempt.  You may qualify for this exemption even if you have a social security number.
• If you are responsible for the individual shared responsibility payment, you should pay it with your tax return or in response to a letter from the IRS requesting payment. You should not make the payment directly to any individual or return preparer.
• The amount due is reported on Form 1040 in the Other Taxes section, and in the corresponding sections of Form 1040A and 1040EZ. You only make a payment for the months you or your dependents did not have coverage or qualify for a coverage exemption.

In most cases, the shared responsibility payment reduces your refund. If you are not claiming a refund, the payment will increase the amount you owe on your tax return.

To learn more, visit the Reporting and Calculating the Payment page on IRS.gov/aca, or use our interactive tax assistant tool, Am I Eligible for a Coverage Exemption or Required to Make an Individual Shared Responsibility Payment?

From IRS

Six Tips on Whether to File a 2015 Tax Return

Most people file a tax return because they have to, but even if you don’t, there are times when you should. You may be eligible for a tax refund and not know it. Here are six tips to help you find out if you should file a tax return:

1. General Filing Rules. Whether you need to file a tax return depends on a few factors. In most cases, the amount of your income, your filing status and your age determine if you must file a tax return. For example, if you’re single and under age 65 you must file if your income was at least $10,300. Other rules may apply if you’re self-employed or if you’re a dependent of another person. There are also other cases when you must file. Go to IRS.gov/filing to find out if you need to file.
2. Premium Tax Credit.  If you enrolled in health insurance through the Health Insurance Marketplace in 2015, you may be eligible for the premium tax credit. You will need to file a return to claim the credit. If you chose to have advance payments of the premium tax credit sent directly to your insurer during 2015 you must file a federal tax return. You will reconcile any advance payments with the allowable premium tax credit. You should receive Form 1095-A, Health Insurance Marketplace Statement, by early February. The form will have information that will help you file your tax return
3. Tax Withheld or Paid. Did your employer withhold federal income tax from your pay? Did you make estimated tax payments? Did you overpay last year and have it applied to this year’s tax? If you answered “yes” to any of these questions, you could be due a refund. But you have to file a tax return to get it.
4. Earned Income Tax Credit. Did you work and earn less than $53,267 last year? You could receive EITC as a tax refund, if you qualify, with or without a qualifying child. You may be eligible for up to $6,242. Use the 2015 EITC Assistant tool on IRS.gov to find out if you qualify. If you do, file a tax return to claim it.
5. Additional Child Tax Credit. Do you have at least one child that qualifies for the Child Tax Credit? If you don’t get the full credit amount, you may qualify for the Additional Child Tax Credit.
6. American Opportunity Tax Credit. The AOTC is available for four years of post secondary education and can be up to $2,500 per eligible student. You, your spouse or your dependent must have been a student enrolled at least half time for at least one academic period. Even if you don’t owe any taxes, you still may qualify. You must complete Form 8863, Education Credits, and file it with your return to claim the credit. Use the Interactive Tax Assistant tool on IRS.gov to see if you can claim the credit. Learn more by visiting the IRS’ Education Credits Web page.

You can use the Interactive Tax Assistant tool on IRS.gov to see if you must file. Look for “Do I need to file a return?” under general topics to see if you need to file. The tool is available 24/7 to answer many tax questions. 

Additional IRS Resources:

• The Premium Tax Credit
• Form 8962, Premium Tax Credit (PTC)
• Schedule 8812 (Form 1040A or 1040), Child Tax Credit
• Publication 972, Child Tax Credit

IRS YouTube Videos:

• Education Tax Credits – English | Spanish | ASL  

IRS Podcasts:

• Education Tax Credits – English | Spanish

From IRS

THE PREMIUM TAX CREDIT - THE BASICS

If you – or anyone on your federal tax return enrolled in health insurance coverage through the Health Insurance Marketplace, you may be eligible for the premium tax credit.

Here are some basic facts about the premium tax credit.

What is the premium tax credit?

The premium tax credit is a credit that helps eligible individuals and families with low or moderate income afford health insurance purchased through the Health Insurance Marketplace.

What is the Health Insurance Marketplace?

The Health Insurance Marketplace is the place where you will find information about private health insurance options, purchase health insurance, and get help with premiums and out-of-pocket costs, if you are eligible. Learn more about the Marketplace at HealthCare.gov.  How do I get the premium tax credit? When you apply for coverage, the Marketplace will estimate the amount of the premium tax credit that you may be able to claim for the tax year, using information you provide about your family composition and projected household income. Based upon that estimate, you can decide if you want to have all, some, or none of your estimated credit paid in advance directly to your insurance company to be applied to your monthly premiums.

If you choose to have all or some of your credit paid in advance, you will be required to reconcile on your income tax return the amount of advance payments that the government sent on your behalf with the premium tax credit that you may claim based on your actual household income and family size. You must file an income tax return for this purpose even if you are otherwise not required to file a return.

Failing to file your tax return will prevent you from receiving advance credit payments in future years. 

What happens if my income or family size changes during the year?  The actual premium tax credit for the year will differ from the advance credit amount estimated by the Marketplace if your family size and household income as estimated at the time of enrollment are different from the family size and household income you report on your return. The more your family size or household income differs from the Marketplace estimates used to compute your advance credit payments, the more significant the difference will be between your advance credit payments and your actual credit.

Visit the PTC Eligibility page on IRS.gov/aca or use our interactive tool, Am I eligible to claim the Premium Tax Credit? on IRS.gov to determine your eligibility.

For more information about the Affordable Care Act and your individual income tax situation, my email is lancewgurel@gmail.com.

From IRS

Claim the Premium Tax Credit & Reconcile Advance Credit Payments on Your 2015 Income Tax Return

You may be eligible to claim the premium tax credit on your 2015 income tax return. The premium tax credit helps eligible individuals and families with low or moderate income afford health insurance. Millions of people who purchased their coverage through a health insurance Marketplace are eligible for premium assistance through the premium tax credit, which individuals chose to either have paid upfront to their insurers as advance payments to lower their monthly premiums or receive when they file their taxes.

If you received the benefit of advance credit payments, you must file a federal tax return and reconcile the advance credit payments with the actual premium tax credit you are eligible to claim on your return.  Failing to file your tax return to reconcile advance payments will prevent you from receiving advance credit payments in future years.

If your advance credit payments are in excess of the amount of the premium tax credit you are eligible for, based on your actual income, you must repay some or all of the excess when you file your return, subject to certain caps.

If you or anyone on your tax return enrolled in health coverage through the Health Insurance Marketplace, you should receive Form 1095-A, Health Insurance Marketplace Statement from your Marketplace form by early February. You need the information from Form 1095-A to file your taxes accurately. This information includes the name of your insurance company, dates of coverage, amount of monthly insurance premiums for the plan you and other members of your family enrolled in, amount of any advance payments of the premium tax credit for the year, and other information needed need to compute the premium tax credit.

More Information

Visit the PTC Eligibility page on IRS.gov/aca or use our interactive tool, Am I eligible to claim the Premium Tax Credit? on IRS.gov to determine your eligibility.

For more information about the Affordable Care Act, visit IRS.gov/aca.

From IRS

Help for International Taxpayers Begins on IRS.gov; Six YouTube Videos Now Available to Assist

The Internal Revenue Service reminds U.S. taxpayers living abroad, as well as other international taxpayers, that IRS.gov provides the best website for getting answers to their important tax questions. This filing season, six new YouTube videos on common issues that international taxpayers face are also available.

The International Taxpayers site at www.irs.gov (  https://www.irs.gov/Individuals/International-Taxpayers   ) is packed with information designed to help taxpayers living abroad, resident aliens, nonresident aliens, residents of U.S. territories and foreign students. The web site also features a directory that includes overseas tax preparers.

“These resources provide critical information to assist taxpayers with many different needs,” said IRS Commissioner John Koskinen.  “Tax issues can be even more challenging for international taxpayers, and IRS.gov provides important details they need to understand their obligations.”

International taxpayers will find the online IRS Tax Map and the International Tax Topic Index to be valuable sources of answers for their tax questions. These online tools assemble or group IRS forms, publications and web pages by subject and provide users with a single entry point to find tax information.

In 2015, the IRS also created videos to assist international taxpayers with some of their most common questions. The videos cover the following international taxpayer topics:

• Filing Requirements 
• Foreign Earned Income Exclusion 
• Individual Taxpayer Identification Number (ITIN) 
• Filing Status if Married to a Nonresident Alien 
• Foreign Tax Credit 
• Introduction to the International Taxpayers Web Page 
  
  
  By law, Americans living abroad, as well as many non-U.S. citizens, must file a U.S. income tax return. In addition, key tax benefits, such as the foreign earned income exclusion, are only available to those who file a U.S. return. These online resources and videos are designed to help affected taxpayers understand how these rules apply to them.
  Federal law requires U.S. citizens and resident aliens to report worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to complete and attach Schedule B to their tax return. Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and usually requires U.S. citizens to report the country in which each account is located.
  Taxpayers with an interest in, or signature or other authority over, foreign financial accounts whose aggregate value exceeded $10,000 at any time during 2015 must file with the Treasury Department a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR). It is due to the Treasury Department by June 30, 2016, must be filed electronically and is only available online through the BSA E-Filing System website. For details regarding the FBAR requirements, see Report of Foreign Bank and Financial Accounts (FBAR).
  U.S. taxpayers with foreign accounts should also understand their reporting requirements under the Foreign Account Tax Compliance Act (FATCA). Third-party information reporting from foreign financial institutions or through intergovernmental agreements began in 2015.
  In addition, under FATCA, certain U.S. taxpayers holding financial assets outside the United States must report those assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets.  Generally, U.S. citizens, resident aliens and certain non-resident aliens must report specified foreign financial assets on this form if the aggregate value of those assets exceeds certain thresholds. Reporting thresholds vary based on whether a taxpayer files a joint income tax return or lives abroad. See the instructions for Form 8938 for more information.
  To help avoid delays with tax refunds, taxpayers living abroad should visit the Helpful Tips for Effectively Receiving a Tax Refund for Taxpayers Living Abroad page.
  The IRS has also added two new international tax topics to Tax Trails, the agency’s interactive online tool that helps taxpayers get answers to their general tax questions. The two topics involve filing requirements and filing status of a U.S. citizen or resident alien married to a nonresident alien.
  More information on the tax rules that apply to U.S. citizens and resident aliens living abroad can be found in,Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, available on IRS.gov.
• Please contact me directly at lancewgurel@gurelcpa.com for advice about your individual tax situation.

From IRS

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The Individual Shared Responsibility Provision and Your 2015 Income Tax Return

The Affordable Care Act requires you, your spouse and your dependents to have qualifying health care coverage for each month of the year, qualify for a health coverage exemption, or make an Individual Shared Responsibility Payment when filing your federal income tax return.   If you had coverage for all of 2015, you will simply check a box on your tax return to report that coverage.

However, if you don’t have qualifying health care coverage and you meet certain criteria, you might be eligible for an exemption from coverage. Most exemptions are can be claimed when you file your tax return, but some must be claimed through the Marketplace.

For any months you or anyone on your return do not have coverage or qualify for a coverage exemption, you must make a payment called the individual shared responsibility payment. If you could have afforded coverage for yourself or any of your dependents, but chose not to get it and you do not qualify for an exemption, you must make a payment. You calculate the shared responsibility payment using a worksheet included in the instructions for Form 8965 and enter your payment amount on your tax return.

More Information

Determine if you are eligible for a coverage exemption or responsible for the Individual Shared Responsibility Payment by using our Interactive Tax Assistant on IRS.gov at https://www.irs.gov/uac/Am-I-Eligible-for-a-Coverage-Exemption-or-Required-to-Make-an-Individual-Shared-Responsibility-Payment%3F

For more information about the Affordable Care Act, visit IRS.gov/aca. If you need health coverage, visitHealthCare.gov to learn about health insurance options that are available for you and your family, how to purchase health insurance, and how you might qualify to get financial assistance with the cost of insurance.

From IRS