Do You Have To File A Tax Return In 2015?

Kelly Phillips Erb for Forbes writes: Tax season opens in eight days. The Internal Revenue Service expects to process nearly 150 million individual tax returns by the time tax season wraps. Will you be filing one of those returns? And more important, do you need to?

For the 2015 tax season, you’ll report the income that you received in 2014. That includes pay received in 2014 but not pay you receive in 2015 for services performed in 2014 (you’ll report that income next year).

Not every person who received income in 2014 has to file a federal income tax return. There are a number of factors that affect whether you have to file including how much you earned – and the source of that income – as well as your filing status and your age. For most folks, this is pretty straightforward.

Using the chart below, choose your filing status, your age and your gross income for the year. If your gross income is above the threshold for your age and filing status, you should file a federal income tax return.These rules apply if no other person claims you on their federal income tax return.

For most taxpayers, the quick “cheat sheet” formula is this: find your standard deduction and add your personal exemption to that number (Remember to consider the increased standard deduction for those over age 65). You can find those numbers here. [snip, the article continues @ Forbes, click here to continue reading....]

Understanding the Affordable Care Act / How the Affordable Care Act Impacts Your Taxes

Intuit writes: How the Affordable Care Act Impacts Your Taxes

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Beginning this tax season, you may notice some changes on your tax return related to the Affordable Care Act, commonly referred to as just ACA or Obamacare.

We've created the following guide to help inform you of potential changes, and to ensure that you understand how the ACA might impact your tax situation this year. In this guide, you'll find specific information around (a) how the ACA might affect your taxes, (b) which new forms you'll need to look for, and (c) what documentation we'll need from you in order to complete your tax return.

To begin, find the description that best represents your current situation.

I enrolled in a health plan through my employer, private insurance, Medicare or Medicaid.

You're all set! All you will need to do is indicate that you have minimum essential coverage, a general term that includes individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and certain other coverage. For a full list of qualifying plan types, visit www.healthcare.gov/fees-exemptions/plans-that-count-as-coverage/.

NEW TAX FORMS TO EXPECT

• Form 1095-C: Your employer may provide a separate Form 1095-C to you and to the IRS, which provides information about your plan and who was covered.
• Form 1095-B: Private insurers and self-funded plans may provide each policyholder and the IRS with information summarizing the coverage provided on Form 1095-B.
• Note: This year is a transition period for Forms 1095-B and 1095-C, so these forms are not a requirement for tax year 2014.

WHAT I NEED FROM YOU

• All of the usual documentation you provide
• Form 1095-C or 1095-B, if you received it from your employer or private insurer.

I purchased a health plan through a Health Insurance Marketplace.

To get started, just let us know that you purchased your plan through a Health Insurance Marketplace, also known as a health exchange.

Did you receive a government subsidy in the form of a tax credit to purchase health insurance through the online Health Insurance Marketplace?

Unlike most tax credits, this tax credit or subsidy could be applied to insurance premiums throughout 2014 when your coverage began. Whether or not you choose to receive this subsidy during the year, we are required to reconcile your credit on your tax return at year end.

If you overestimated your 2014 household income when you applied for the tax subsidy, you will receive the remainder of the subsidy in the form of a refundable credit, which will increase the refund amount or decrease the amount owed on your tax return. But if you earn more than you projected, you will have to pay a portion or all of the subsidy back, which will decrease the refund amount or increase the amount owed on your tax return.

In addition to a change in income, make sure to report all life changes (i.e. getting married or having a child) through your Marketplace to ensure your subsidy is correct.

NEW TAX FORMS TO EXPECT

• Form 1095-A: If you purchased insurance through the Health Insurance Marketplace you will receive a new form, Form 1095-A, which will show details of your insurance coverage including the effective date, amount of premium and the advance premium tax credit.
• Form 8962: If you are eligible to receive a premium tax credit in 2014, information about your advance premium tax credit will be reported and the actual premium tax credit will be determined on Form 8962.

WHAT I NEED FROM YOU

• All of the usual documentation you provide
• Form 1095-A, if you purchased health insurance through the Health Insurance Marketplace

I don't have health insurance.

Under the ACA, individuals who did not have health insurance for more than three months in 2014 must pay a tax penalty. However, according to Congressional Budget Office, an estimated 20 million Americans may qualify to waive that penalty this year. To find out if you qualify for an exemption, review the material below.

How do I know if I qualify for an exemption?
The Affordable Care Act recognizes there are legitimate reasons people may be exempt from paying a tax penalty for not having health insurance.

Some of the common exemption reasons include:

• Can't afford health insurance; the lowest-priced coverage available would cost more than 8 percent of their household income
• Had difficulty signing up for health insurance through a state or federal marketplace
• Had medical expenses you couldn't pay in the last 24 months that resulted in substantial debt
• Had an individual insurance plan cancelled, and believe other marketplace plans are unaffordable
• Received a shut off notice from a utility company

For the full list of exemptions, please check www.healthcare.gov/fees-exemptions/exemptions-from-the-fee/

If you've been uninsured for fewer than three consecutive months of the year, you don't need to apply for an exemption. This will be handled when we file your 2014 taxes. Also, if you are not required to file a tax return because your income is too low, you don't need to apply for an exemption.

If you believe you qualify for one of the exemptions, please notify us as soon as possible, so we will be able to let you know whether you can claim it on your tax return or apply through the Health Insurance Marketplace along with the required documentation in certain cases. Different exemptions require different forms, so be sure to apply with the correct document. You can find and print all of the forms at healthcare.gov/exemptions.

For those exemptions that should be filed through the Health Insurance Marketplace, the approval process can take a couple of weeks, so don't wait until we file your taxes to apply for an exemption. Instead, submit your application as soon as possible. That way, it will be documented and processed in time, and we can file your tax return as soon as the IRS begins accepting returns in January.

WHAT I NEED FROM YOU

• All of the usual documentation you provide
• If you are getting an exemption through the Health Insurance Marketplace (also called an exchange) and not claiming the exemption directly on the tax return, you will also need to provide the exemption certificate number.

What if I'm not exempt?
If you don't have health insurance and don't qualify for an exemption, you will have to pay a penalty when you file for your 2014 tax return. If that's the case, don't worry: We will help you calculate the exact amount of your tax penalty and work to identify any qualifying deductions that may help offset this fee.

The tax penalty, also referred to as the “individual shared responsibility payment”, is based on your family size and income. The penalty will be prorated based on the number of months you are uninsured and will increase each year.

For tax year 2014, the annual one-time tax penalty will be $95 per adult, or one percent of your total income, whichever is greater. For uninsured children in your family, the penalty is $47.50 per child, with a family maximum of $285 for the year. The tax penalty is assessed on your 2014 tax return.

Each year following 2014, the penalty increases — in 2015 the penalty is $325 per person, $162.50 per child — or two percent of your income. By 2016, the penalty rises to $695 per adult, $347.50 per child — or 2.5 percent of your household income.

We know that the tax filing process can sometimes be overwhelming and that the Affordable Care Act could potentially further complicate the process. Please know that we are here to help you navigate these changes.

2015 Taxes: What's on Deck for Your Investments / Higher 401(k) contribution limits, myRA introduction are among bigger tax changes for new year.

Christine Benz for MorningStar writes:  Two years ago, many investors were on tenterhooks as Congress wound down its session. A host of the Bush-era tax cuts were on the chopping block as part of the so-called "fiscal cliff," including the reduction in the tax on dividends and the high estate-tax exclusion.  

In the end, Congress made only modest adjustments to investment-related taxes back then; for example, a 39.6% marginal tax rate went into effect for the highest-income earners in 2013, and the new Medicare surtax kicked in on schedule, too.  

Since then, the tax-related drama has been pretty subdued by comparison. Dividend and capital gains tax rates have stayed the same, and the federal estate tax will only affect the uber-rich. But that's not to suggest that investors can safely tune out tax considerations. The market's strong performance, combined with a nasty season for mutual fund capital gains distributions, accentuates the value of taking maximum advantage of tax-sheltered wrappers like 401(k)s and IRAs, for example. It also highlights the virtues of carefully monitoring your taxable positions to help insure that you're not paying more in dividend and capital gains taxes than you need to.  

Here's an overview of what's changing, tax-wise, in 2015, as well as what's staying the same. I've emphasized those tax items that have at least some connection to investments. 

Dividend and Capital Gains Taxes
Not too much to report here. Dividend and capital gains rates will remain the same in 2015 as they were last year, though the income tax brackets used to determine those rates have been adjusted for inflation. Investors who are in the 39.6% income tax bracket will pay a 20% tax rate on qualified dividends and long-term capital gains; investors in the 25% to 35% brackets will pay a 15% tax rate on qualified dividends and long-term gains; and investors in the 10% and 15% tax brackets for income tax will owe 0% tax on dividends and long-term capital gains. Nonqualified dividends, such as from REITs, and ordinary income from taxable bonds will be taxed at investors' ordinary income tax rates. 

  [snip, the article continues @ MorningStar, click here to continue reading....]

5 Useful Google Apps for Accountants

Vinod Kumar for Accounting Education writes:  There are two types of google apps which may be helpful for accountants. One is which can use in computer and second is which can use in mobile. First, you can get from google chrome web-store and second, you can get google play store. Some are free and fore some, you need to pay.
Here, we are writing some google apps which may increase the productivity of accountants.

1. Book Keeper Accounting App

This is free mobile app which you can download and install in your smart mobile phone. It has complete accounting system with this accountant can record any transaction. It also helps to track the inventory reports. Any time and anywhere, you can generate invoice and send it to your customer on whats-app or other emails through mobile. Only trial basis, it is free for 45 days, then, you have to pay $ 35 per year. All data of Tally can be imported and exported in this app. Except this, there are lots of features in this Google app, so this is most useful app for accountant.


2. Accounting Education App

Accounting Education App is official app of accounting education website. This app is useful for accountant. With the help of this app, accountant can gain new knowledge relating to accounting. They can increase their current knowledge by learning different concepts, definitions, examples and How-to tutorials relating to accounting and finance.

3. Income Tax Calculator App 

Indian accountant can install this app for tax calculation. This app will solve technical complication of following income tax law for calculating income tax.

4. Money Counter 

This is useful if you or your assistant is doing the duty of cashier or shopping billing center. You just install this and you can easily count and manage your different notes currency.

5. Easy Currency Converter App

Easy currency converter app is helpful convert one currency into other currency. If you are the accountant in the company whose business in different countries, you can use this app for knowing the value of your currency in other country's currencies.

Except above app, you can search and find some of wonderful apps which can increase your productivity 10 times. For example, in my case, I installed call recorder, it helps me to know what I and other say in mobile talking. So, you can also find such wonderful app on google play store and google web store. There are also substitute of each app, so, use them one by one and click rank them by stars.

Maximizing Your Tax Deductions And Tax Breaks As A U.S. Homeowner

 Dan Green for The Mortgage Reports writes:  U.S. Tax Code Offers Breaks To Homeowners

This article is current for the 2014 tax year and should not be considered tax advice. For tax-related questions or mortgage strategy related to your individual tax liability, speak with a licensed accountant.

It's January 2015 and, for Americans, the 2014 tax year has concluded.

Within weeks, U.S. consumers will begin receiving such tax-related forms as the W-2, the 1099, and, for homeowners, the 1098, which is also known as the Mortgage Interest Statement.

The U.S. tax code offers incentives to homeowners, and by taking advantage of these breaks, 1040-filing citizens can maximize their financial investment in homeownership.

Whether a home is financed via a mortgage, or paid-in-full with cash, there are a multitude of tax-savings opportunities associated with owning a home -- even at current mortgage rates which are the lowest since May 2013.

Of course, every homeowner's financial situation is different, so please consult with a tax professional regarding your individual tax liability.

Tax Deduction #1: Mortgage Interest Paid

Mortgage interest paid to a lender is tax-deductible and, for some homeowners, interest paid ca provide a large tax break -- especially in the early years of a home loan. This is because the standard mortgage amortization schedule is front-loaded with mortgage interest.

At today's mortgage rates, annual interest payments on a 30-year loan term exceed annual principal payments until loan's 10th year.

Mortgage interest tax deductions are extended to second mortgages, too.

Interest paid on a refinance loan, home equity loans (HELOAN) and home equity lines of credit (HELOC) are tax-deductible as well. However, restrictions apply on homeowners who raise their mortgage debt beyond their property's fair market value.

The Internal Revenue Service (IRS) imposes a $1 million loan size cap. Loans for more than one million dollars are exempt from this tax deduction.

This is one reason why homeowners with jumbo mortgages limit themselves to one million dollars per loan. Loans for more than $1,000,000 sacrifice mortgage interest tax deduction. 

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Tax Deduction #2: Discount Points

Mortgage tax deductions can extend beyond your monthly payment. Discount points paid in connection with a home purchase or a refinance are typically tax-deductible, too.

A discount point is a one-time, at-closing fee which gets a borrower access to mortgage rates below current "market rates". One discount point costs one percent of the borrower's loan size.

As an example, if the current market mortgage rate is 3.5%, paying one discount point on loan may get you access to a mortgage rate of 3.00%. For a loan in Orange County, California, at the local 2015 conforming loan limit of $625,500, this one discount point costs $6,250.

In Miami, Florida, one discount point at the local loan limit of $417,000 would cost $4,170.

According to the IRS, discount points are considered "prepaid mortgage interest" because it's an advance payment on a mortgage in exchange for lower interest payments over time. This classification, in turn, can render discount points tax-deductible.

The tax-deductibility of discount points varies by loan type.

When discount points are paid in conjunction with a purchase, the cost may be deducted in full in the year in which they were paid, dollar-for-dollar. With respect to a refinance, discount points are not fully tax-deductible in the year in which they are paid.

With a refinance, discount points are typically amortized over the life of the loan.

The cost of one discount point on a 30-year loan can be deducted at 1/30 of its value per tax-calendar year.

Other Deductions : Property Taxes, Renovations, Home Office

Real Estate Taxes

Homeowners typically pay real estate taxes to local and state entities. These property taxes can often be deducted in the year in which they are paid. If your mortgage lender currently escrows your taxes and insurance, it will send an annual statement to you which you can file with your complete federal tax returns. Your accountant can help determine the payment's tax deductibility.

Home Improvements

For tax-paying homeowners, certain types of home improvement projects are tax-deductible. Home improvements made for medical reasons, for example, can be tax-deductible. If you are making home renovations to accommodate a chronically ill or disabled person, and the renovations do not add to the overall value of the home, the project costs are typically 100% tax deductible. Repairs and improvements made for aesthetic purposes are not tax-deductible.

Home Offices

Homeowners who work from their residence can typically deduct the expenses of maintaining a qualified home office. Allowable tax deductions for a home office include renovations to the room(s), telephone lines, and the cost of heat and electric. Before claiming a home office on your returns, though, be sure to speak with an accountant to understand the benefits and liabilities. There are caveats to claiming home office tax deductions on your tax returns, and the rules can be tricky.

Budget For Your Tax Breaks

Tax deductions will reduce your annual costs of homeownership and, for some homeowners, mortgage interest tax deductions affect the math of the "Should I Rent or Should I Buy?" question.

Tax law changes frequently, though. Consider building your housing budget with the help of a tax preparer. Get a feel for how much home you can afford before and after accounting for your various homeowner tax breaks.

And, as you build your budget, use legitimate mortgage rates in your calculations. Historical mortgage rates are much higher than today's low rates and can skew your calculations.

Furthermore, the tax deductibility of a mortgage will vary by the length of your loan. 

15-year fixed-rate mortgages have become increasingly popular as interest rates have dropped, but the deductibility of a 15-year loan is decidedly less than that of a 30-year loan. This is because homeowners pay approximately 65% less mortgage interest over time with a 15-year mortgage as compared to a 30-year.

Less interest paid means fewer mortgage interest tax deductions. 

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