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Sunday, January 25 2015

Health plans that qualify as minimum essential coverage
As of 2014, taxpayers is required to have health insurance coverage. Health plans that qualify as a minimum essential coverage. If you are covered by any of the following types of plans, you're considered covered under the health care law and don't have to worry about paying a penalty.

  • Any marketplace plan, or any individual insurance plan you already have
  • Any employer plan (including COBRA plans, with or without "grandfathered" status)
  • Retiree health plans
  • Medicare
  • Medicaid
  • The Children's Health Insurance Program (CHIP)
  • TRICARE (current service members and military retirees, their families, and survivors)
  • Veteran health care programs (including the Veterans Health Care Program, VA Civilian Health and Medical Program (CHAMPVA), and Spina Bifida Health Care Benefits Program)
  • Peace Corps Volunteer plans
  • Self-funded health care coverage offered to students by universities for plan or policy years that begin on or before December 31, 2014

Health plans that don't count as coverage
Some products that help you pay for medical services don't qualify as minimum essential coverage. If you have only this kind of product, you may have to pay the fee: Example include:

  • Coverage only for vision care or dental care
  • Worker's compensation
  • Coverage only for a specific disease or condition
  • Plans that offer only discounts on medical services.
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Tuesday, January 20 2015

Getting a big refund on your tax return sounds great. But, be aware! when some one tells you that they can get you a big refund, on your tax return. It might sound good and tempting but consequences may follow and you will be in debt with IRS for years, trying to pay it back. Most of those individuals are not even registered as a tax practitioner and only after for your money.

With over 35 years of experience as a tax preparer, we have helped taxpayers with an audit from IRS due to  due diligence and not filing their tax return the right way. Tax return is not just entering amounts and numbers, in order to maximize and calculate a big return. Tax Rules and Regulations should be applied at all times. Individuals who tells you that they can get you the maximum refund that you deserve but charges you ridiculously are the people you have watch out for. Most of them will ask for half of your refund but on the other hand, not sign your return and mark your return as self prepared.

There are several online resources where you can check if a tax practitioner is registered to prepare tax returns, like CTEC. Secure your investment and protect yourself from individuals who will inflict problems to your future. It's better to get your your income tax return prepared the right way and worry free. A great tax preparer will always try to maximize and get you the refund you truly deserve.

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Friday, January 16 2015

Individual's 2014 Federal Return and the Affordable Care Act.

As we get closer to the beginning of the 2015 filing season, it is important to understand how the Affordable Care Act will impact every individual who files a 2014 federal return. They may be impacted in a small way or major way depending on their health insurance status and where they obtained their health insurance during 2014.

Since the majority of taxpayers will be covered for the entire year by their employer, a government sponsored plan (such as Medicaid or Medicare), or from other qualifying health insurance, they do not need to wait for Form 1095-A in order to file their taxes. Form 1095-A is scheduled to be mailed the first week of February 2015.

Taxpayers who purchased their health insurance at the Marketplace (State or Federal Exchange) will need to do the following:

  • Taxpayer will receive by mail a Form 1095-A (Health Insurance Marketplace Statement) from the Marketplace. This information return should be received by the taxpayer by January 31, 2015 and will include details needed to complete the premium tax credit and do the reconciliation if they received an advance premium tax credit (subsidy) that helped pay their monthly health insurance premiums during 2014.
  • Complete Form 8962 (Premium Tax Credit)
  1. Calculate the premium tax credit based on their 2014 income and family size.
  2. Enter the advance premium tax credit (subsidy) information from Form 1095-A, Part III, if applicable.
  3. Reconcile the antual premium tax credit with the subsidy they received during 2014 which will result in:
    - Refundable Credit - Calculated credit is greater than subsidy received.
    - Additional Tax - Subisdy received is greater than calculated credit.

Taxpayers who did not have health insurance for 2014 will do the following:

  • Complete Form 8965 (Health Coverage Exemptions) to claim an exemption from the health care coverage requirement;
  • Have to pay shared responsibility payment (penalty) which will be calculated according to a worksheet in the Form 8965 instructions.

It should be noted that some individual may have to file both the Form 8962, Form 8965, and may have penalty due, or any combination thereof based on their individual or family member health insurance status during 2014.

To review or learn the new Affordable Care Act (ACA) mentioned above or for more information on the premium tax credit, exemptions, advance premium tax credit and penalty, do not hesitate to contact us.

For those who does not have health insurance and would like to inquire about getting one. Please call us, we have until February 15, 2015 to get enrolled and avoid the penalty.

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Wednesday, January 14 2015

Section 179 property is property that you acquire by purchase for use in the active conduct of your trade or business, and is one of the following.

  • Tangible personal property, including cellular telephones and similar telecommunications equipment.

  • Qualified section 179 real property.

  • Other tangible property (except buildings and their structural components) used as:

    1. An integral part of manufacturing, production, or extraction or of furnishing transportation, communications, electricity, gas, water, or sewage disposal services;

    2. A research facility used in connection with any of the activities in (1) above; or

    3. A facility used in connection with any of the activities in (1) above for the bulk storage of fungible commodities.

  • Single purpose agricultural (livestock) or horticultural structures.

  • Storage facilities (except buildings and their structural components) used in connection with distributing petroleum or any primary product of petroleum.

  • Off-the-shelf computer software placed in service before January 1, 2015.

Section 179 property does not include the following.

  • Property held for investment (section 212 property).

  • Property used mainly outside the United States (except for property described in section 168(g)(4)).

  • Property used mainly to furnish lodging or in connection with the furnishing of lodging (except as provided in section 50(b)(2)).

  • Property used by a tax-exempt organization (other than a section 521 farmers' cooperative) unless the property is used mainly in a taxable unrelated trade or business.

  • Property used by a governmental unit or foreign person or entity (except for property used under a lease with a term of less than 6 months).

  • Air conditioning or heating units

2014 Without changes: Deduction Rules Extension and Real Estate Expenditures.

  • The maximum Section 179 dedcution is scheduled to be only $25,000
  • The phase-out threshold is scheduled to fall to $200,000, and
  • The Section 179 deduction privilege for real estate expenditures is set to no longer be available.
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Tuesday, January 13 2015

Tax Service Practitioner "should provide" their clients with the highest quality representation by adhering to best practices in providing advice, preparing a submission to the IRS, and assisting in preparing a submission to the IRS. The use of the term "should provide" indicates that the goal established by the IRS, as opposed to a requirement that must be met in a disciplinary proceeding.

That said, if best practices are followed by the tax preparer or practitioner, the likelihood of a practitioner being a respondent in a disciplinary proceeding will certainly be less than otherwise. Best practices should be followed not only by the practitioner, but those that assist the practitioner, are employed by the practitioner, and are contractors providing a service for or on behalf of the practitioner.

The element of best practices including, (a) client communications, (b) establishing facts, assumptions, and representations, relating applicable law (including case law) to the facts, and arriving at a conclusion supported by the fact and the law, (c) advising the client as to the consequences of the conclusions, and (d) acting fairly and with integrity.

Tax Practitioners should provide: clear communication, facts and law support conclusion, Inform client or taxpayer of expected outcomes, and ethical standards in representation.

1. Clear Communication - In adhering to best practices, a tax professional must ensure that he or she is communicating effectively with the client. This is true especially with respect to the terms of the engagement. In this regard, best practices would call for the tax professional to document the engagement with an agreement or letter that clearly sets forth the form and scope of the services or advice wich the tax professional will render. Documenting the form and scope of the services or advice should enable both the client and the practitioner to understand what services will be performed, and any exclusion or exceptions.

The engagement agreement or letter also will set forth a fixed price or hourly rates for the services rendered, an equally important aspect of keeping the client fully informed. Practitioner should "determine the client's expected agreement or letter addresses this issue, especially if the client is expecting to use the advice to justify a particular tax treatment that was previously used by the client.

2. Facts and Law Support Conclusion - Practitioners must establish the relevant facts, evaluate the reasonable assumptions or representations, relate applicable law (including case law) to relevant facts, and arrive to a conclusion supported by the facts and the law. This will call for the tax professional to filter irrelevant from relevant factual information, understand applicable tax and case law (and, if necessary, research applicable tax and case law so as to provide with the highest quality representation), and relate the law to the relevant facts.

3. Informing Clients of Expected Results - The tax professional should inform the client of the implications of the conclusions that have been reached. Tax Practitioners should advice the client as to whether the client may rely on the advice to avoid the accuracy-related penalties associated with a particular tax position. By way of reminder, if the practitioner advices the client that the advice cannot be relied upon to avoid accuracy-related penalties, the wise practitioner will document this advice to avoid any later misunderstanding (or claimed misunderstood).

4. Ethical Conduct of Representation - Lastly, practitioners are obligated to act "fairly and with integrity" when practicing before the IRS. White "fairly" is not defined, the clear import of this phrase is that practitioners should act honestly and with the utmost respect for the law, the client, the IRS, and other practitioners. By doing so, tax preparation should be easy for every one.

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Monday, January 12 2015

How does electronic filing (eFile) benefit you? There are many benefits to electronically filing your income tax return. Some benefits of using E-File to file your return are that it provides faster refunds, it provides ability to file in English or Spanish, and there are fewer costs by using minimal amounts of paper. If you are looking for a faster refund, you may authorize a direct deposit to a financial institution that you included in the electronic portion of the return. If you do not want to use the direct deposit option to have it deposited into your checking or savings account, you may have a check mailed to you, which usually takes three weeks to receive. One you have E-filed your return, the IRS will send you an acknowledgement receipt. After 72 hours of receiving the acknowledgement receipt, you may go online to check the status.

An added benefit and convenience, most states allows you to file your electronic state and federal return at the same time. You will need to check with your state tax agency and/or IRS for the rules regarding the State you live in. If a tax professional is E-filing your tax return, you will need to complete Form 8879, IRS e-file signature authorization, to give permission to your tax professional to enter your PIN on your return.

The benefits of using IRS e-file are enormous. It is convenient and it saves time and money. Whether it is from your home or at your business. The proliferation of e-file system must be considered when filing your return. We have come a long way and there is no easier and faster way than to e-File your return.

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Saturday, January 10 2015

2014 Standard Mileage Deduction

Source: IR-2013-95, Dec. 6, 2013

WASHINGTON — The Internal Revenue Service today issued the 2014 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2014, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 56 cents per mile for business miles driven
  • 23.5 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The business, medical, and moving expense rates decrease one-half cent from the 2013 rates.  The charitable rate is based on statute.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle.  In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.

These and other requirements for a taxpayer to use a standard mileage rate to calculate the amount of a deductible business, moving, medical, or charitable expense are in Rev. Proc. 2010-51.  Notice 2013-80 contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.

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Thursday, January 08 2015

Health care: individual responsibility.  You must either:

  • Indicate on your tax return that you and your family had health care coverage throughout 2014,

  • Claim an exemption from the health care coverage requirement for some or all of 2014 and attach Form 8965, or

  • Make a shared responsibility payment if, for any month in 2014, you, your spouse (if filing jointly), or your dependents did not have coverage and do not qualify for a coverage exemption.

See Form 8965 for more details.

Premium tax credit. You may be eligible to claim the premium tax credit if you, your spouse, or a dependent enrolled in health insurance through the Health Insurance Marketplace. See Form 8962 for more information.

Advance payments of the premium tax credit. Advance payments of the premium tax credit may have been made to the health insurer to help pay for the insurance coverage of you, your spouse, or your dependent. If advance payments of the premium tax credit were made, you must file a 2014 tax return and Form 8962. If you enrolled someone who is not claimed as a dependent on your tax return or for more information, see the Instructions for Form 8962

Form 1095-A. If you, your spouse, or a dependent enrolled in health insurance through the Marketplace, you should have received Form(s) 1095‐A. If you receive Form 1095‐A for 2014, save it. It will help you figure your premium tax credit. If you did not receive a Form 1095‐A, contact the Marketplace.

Expired tax benefits. At the time this publication was prepared for printing, certain tax benefits had expired. These included the deduction for educator expenses and the tuition and fees deduction. In addition, the health coverage tax credit has expired. You can find out whether legislation extended these and other tax benefits to allow you to claim them on your 2014 return at

Medicaid waiver payments. If you received certain payments under a Medicaid waiver program for caring for someone who lives in your home with you, you may be able to exclude these payments from your income.If you reported these payments on your return for 2013 or an earlier year, see You may want to file Form 1040X to amend that prior year return.

Mailing your return.  If you live in Missouri and need to make a payment with your paper return, you will need to mail it to a different address this year. See Where Do I File? later in this chapter.

Direct deposit. To combat fraud and identity theft, the number of refunds that can be directly deposited to a single financial account or prepaid debit card is now limited to three a year. After this limit is exceeded, paper checks will be sent instead.

Direct Pay. The best way to pay your taxes is with IRS Direct Pay. It's the safe, easy, and free way to pay from your checking or savings account in one online session. Just click “Pay Your Tax Bill” on

Who must file. Generally, the amount of income you can receive before you must file a return has been increased. See Table 1-1, Table 1-2, and Table 1-3 for the specific amounts.



File online.  Rather than filing a return on paper, you may be able to file electronically using IRS e-file. Create your own personal identification number (PIN) and file a completely paperless tax return. For more information, see Does My Return Have To Be on Paper , later.

Change of address. If you change your address, you should notify the IRS. You can use Form 8822 to notify the IRS of the change. See Change of Address , later, under What Happens After I File.

Enter your social security number. You must enter your social security number (SSN) in the spaces provided on your tax return. If you file a joint return, enter the SSNs in the same order as the names.

Direct deposit of refund. Instead of getting a paper check, you may be able to have your refund deposited directly into your account at a bank or other financial institution. See Direct Deposit under Refunds, later. If you choose direct deposit of your refund, you may be able to split the refund among two or three accounts.

Pay online or by phone. If you owe additional tax, you may be able to pay online or by phone. See How To Pay , later.

Installment agreement. If you cannot pay the full amount due with your return, you may ask to make monthly installment payments. See Installment Agreement , later, under Amount You Owe. You may be able to apply online for a payment agreement if you owe federal tax, interest, and penalties.

Automatic 6-month extension. You can get an automatic 6-month extension to file your tax return if, no later than the date your return is due, you file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. See Automatic Extension , later.

Service in combat zone. You are allowed extra time to take care of your tax matters if you are a member of the Armed Forces who served in a combat zone, or if you served in the combat zone in support of the Armed Forces. See Individuals Serving in Combat Zone , later, under When Do I Have To File.

Adoption taxpayer identification number. If a child has been placed in your home for purposes of legal adoption and you will not be able to get a social security number for the child in time to file your return, you may be able to get an adoption taxpayer identification number (ATIN). For more information, see Social Security Number (SSN) , later.

Taxpayer identification number for aliens. If you or your dependent is a nonresident or resident alien who does not have and is not eligible to get a social security number, file Form W-7, Application for IRS Individual Taxpayer Identification Number, with the IRS. For more information, see Social Security Number (SSN) , later.

Frivolous tax submissions. The IRS has published a list of positions that are identified as frivolous. The penalty for filing a frivolous tax return is $5,000. Also, the $5,000 penalty will apply to other specified frivolous submissions. For more information, see Civil Penalties , later.

Posted by: Sync Merchants AT 03:47 pm   |  Permalink   |  0 Comments  |  Email
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