Wednesday, January 28, 2015

Update

   The IRS started their e-filing season on the 20th as promised.  Many people have already received W-2's and other information, but there are still a couple of days left in January, so there will no doubt be some more forms arriving in the mail for many people.
    People with investment funds often receive a preliminary set of 1099's along with a note saying that they will probably be revised.  Some people wait till March for the final revision.
    We hope that everyone made it through the blizzard OK.  We were unable to get out of the house yesterday, but I am in the Centerville office today.  Will be in Provincetown tomorrow.  (If all goes well.)

Friday, January 16, 2015

Tax season news

Tax Season Opens
The IRS will begin accepting e-filed returns on January 20th.

Obama-Care
If you have health insurance, we will just need to check off a box on the return to say so.  That’s all, no problems!  Since most people in Massachusetts have some kind of health insurance these days, this should be easy.
If you do not have health insurance, we will have to fill out a form or two, and it could get a little complicated.  You might have to pay a penalty, but since this is the first year, the penalties are not much.
An interesting thing about the penalties is that, according to the law, the IRS cannot go after you to collect the health insurance penalty the way they can for a regular tax liability.  They can send you bills, but they can’t levy bank accounts or seize property.  However, if you have a refund in a subsequent year, they can keep the refund (or part of it) and apply it to the uncollected penalty.

“Tax Extenders”
At the end of 2014, Congress passed and the President signed a law to extend a large number of tax deductions and credits.  (We went through the same thing for 2013.)
Some of the more popular items are:
Out of pocket expenses for school teachers
Mortgage insurance premiums
Option to deduct sales tax instead of state income tax
Exclusion of debt forgiveness income on a personal residence
Direct distributions from IRA’s to charities
Various energy credits and deductions
Various business credits and deductions, including:
   Research credit
   Hiring credits
   Accelerated depreciation for various business property improvements
   Expanded limits on expensing equipment rather than depreciating it
   Film and television production deductions

All these extenders are good only for 2014, which means that for 2015 we will be in limbo about them again until and unless Congress and the President agree on what to do about them.  Who knows how long that will take this year?  If the past is any guide, probably they will wait till next December.

In the meantime, tax season is upon us.  Please feel free to call us when you are ready to do yours.

Thank you!