Newly Married Couples Should Report Marriage to Marketplace

If you’re recently married, you probably have a list of things to do.  There’s one other thing you should add to that list: a health insurance review. This is particularly important if you enrolled in coverage through a Health Insurance Marketplace and you receive premium assistance in the form of advance payments of the premium tax credit.

When you apply for assistance to help pay the premiums for health coverage through the Marketplace, the Marketplace will estimate the amount of the premium tax credit that you may be able to claim for the tax year using the information you provide. This information includes details about your family composition and your projected household income.
It is important for you to report life changes – known as changes in circumstances – to your Marketplace to get the proper type and amount of financial assistance and to avoid getting too much or too little in advance. Reporting changes in circumstances will allow the Marketplace to adjust your advance credit payments. This adjustment will help you avoid getting a smaller refund or owing money that you did not expect to owe on your federal tax return.
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.
Other changes you should report to the Marketplace include:

• Birth or adoption
• Marriage or divorce
• Moving to a different address
• Increases or decreases in your household income

These changes may also open the door for the Marketplace special enrollment period that permits health care plan changes. In most cases, the special enrollment period for Marketplace coverage is open for 60 days from the date of the life event.
The Premium Tax Credit Change Estimator can help you estimate how your premium 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. Because these tools provide only an estimate, you should not rely on 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.

Source: Internal Revenue Service

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(858)247-1680

ITIN - New requirement for dependents whose passports don’t have a date of entry into the U.S.

The IRS changed its policy on acceptable documentation for issuing dependent Individual Taxpayer Identification Numbers (ITIN). The agency no longer accepts passports that do not have a date of entry into the U.S. as a stand-alone identification document for dependents from countries other than Canada or Mexico or dependents of military members overseas.

In addition to their passport, affected applicants will now be required to submit either

• U.S. medical records for dependents under age six or • U.S. school records for dependents under age 18, along with the passport.

Dependents aged 18 and over can submit a rental or bank statement or a utility bill listing the applicant’s name and U.S. address, along with their passport.

Form W-7 dependent applications submitted after Sept. 30, 2016, that don’t meet the new identification requirement, will be incomplete. Applicants will be notified by correspondence and given 45 days to respond with the appropriate documentation.

The new policy ensures that any dependent issued an ITIN will be used for legitimate tax purposes and serves to further protect the ITIN program and refund process.

Source: Internal Revenue Service

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(858)247-1680

Package Pricing - Take Advantage Now

Take advantage now for the next tax season, check our package pricing HERE

 

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Record Keeping

If you have a business, keeping track of income and expenses is part of the job.
Be sure to keep:

• Track of ALL spending;
• A copy of EVERY tax form you file;
• Separate bank accounts for business and personal purposes;
• Personal expenses separate from business expenses;
• All business records at least four years after return is filed.

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Five Tax Tips for Gambling Income and Losses

Report any gambling winnings as income on your tax return. Be sure you itemize to deduct gambling losses up to the amount of your winnings. If you are a casual gambler, these tax tips can help:

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 get a Form W-2G.
4. How to deduct losses.  You can deduct your gambling losses on Schedule A, Itemized Deductions. The total you can deduct, however, is limited to the amount of the gambling income you report on your return.
5. Keep gambling receipts.  Keep records of your wins and losses. This means keeping items such as a gambling log or diary, receipts, statements or tickets.

 Source: Internal Revenue Service

contact@officetaxservices.com

(858)247-1680

Home Energy Tax Credits Save You Money at Tax Time

Certain energy-efficient home improvements can cut your energy bills and save you money at tax time. Here are some key facts that you should know about home energy tax credits:
Non-Business Energy Property Credit 

• Part of this credit is worth 10 percent of the cost of certain qualified energy-saving items you added to your main home last year. This may include items such as insulation, windows, doors and roofs.
• The other part of the credit is not a percentage of the cost. This part of the credit is for the actual cost of certain property. This may include items such as water heaters and heating and air conditioning systems. The credit amount for each type of property has a different dollar limit.
• This credit has a maximum lifetime limit of $500. You may only use $200 of this limit for windows.
• Your main home must be located in the U.S. to qualify for the credit.
• Be sure you have the written certification from the manufacturer that their product qualifies for this tax credit. They usually post it on their website or include it with the product’s packaging. You can rely on it to claim the credit, but do not attach it to your return. Keep it with your tax records.
• You must place qualifying improvements in service in your principal residence by Dec. 31, 2016.

Residential Energy Efficient Property Credit

• This tax credit is 30 percent of the cost of alternative energy equipment installed on or in your home.
• Qualified equipment includes solar hot water heaters, solar electric equipment, wind turbines and fuel cell property.
• Qualified wind turbine and fuel cell property must be placed into service by Dec. 31, 2016. Hot water heaters and solar electric equipment must be placed in to service by Dec. 31, 2021.
• The tax credit for qualified fuel cell property is limited to $500 for each one-half kilowatt of capacity. The amount for other qualified expenditures does not have a limit. If your credit is more than the tax you owe, you can carry forward the unused portion of this credit to next year’s tax return. • The home must be in the U.S. It does not have to be your main home, unless the alternative energy equipment is qualified fuel cell property.

Use Form 5695, Residential Energy Credits, to claim these credits.


Source: Internal Revenue Service

contact@officetaxservices.com

(858)247-1680