The Health Care Law – Getting Ready to File Your Tax Return

by NFS | Jan 23, 2015 | Archives

It’s always a good idea to prepare early to file your federal income tax return.  Certain provisions of the Affordable Care Act – also known as the Health Care Law – will probably affect your federal income tax return when you file this year.

You or your tax professional should consider preparing and filing your tax return electronically.  Using tax preparation software is the easiest way to file a complete and accurate tax return.

Here are five things you should know about the health care law that will help you get ready to file your tax return.

Coverage requirements

The Affordable Care Act requires that you and each member of your family have qualifying health insurance coverage for each month of the year, qualify for an exemption from the coverage requirement, or make an individual shared responsibility payment when filing your federal income tax return.

Reporting requirements

Most taxpayers will simply check a box on their tax return to indicate that each member of their family had qualifying health coverage for the whole year. No further action is required. Qualifying health insurance coverage includes coverage under most, but not all, types of health care coverage plans. Use the chart on IRS.gov/aca to find out if your insurance counts as qualifying coverage.

For a limited group of taxpayers -those who qualify for, or received advance payments of the premium tax credit – the health care law could affect the amount of tax refund or the amount of money they may owe when they file in 2015. Visit IRS.gov/aca to learn more about the premium tax credit.

Exemptions

You may be eligible to claim an exemption from the requirement to have coverage.  If you qualify for an exemption, you will need to complete the new IRS Form 8965, Health Coverage Exemptions, when you file your tax return.   You must apply for some exemptions through the Health Care Insurance Marketplace.  However, most of the exemptions are easily obtained from the IRS when you file your tax return. Some of the exemptions are available from either the Marketplace or the IRS.

If you receive an exemption through the Marketplace, you’ll receive an Exemption Certificate Number to include when you file your taxes. If you have applied for an exemption through the Marketplace and are still waiting for a response, you can put “pending” on your tax return where you would normally put your Exemption Certificate Number.

Individual Shared Responsibility Payment

If you do not have qualifying coverage or an exemption for each month of the year, you will need to make an individual shared responsibility payment when you file your return for choosing not to purchase coverage. Examples and information about figuring the payment are available on the IRS Calculating the Payment page.

Premium Tax Credits

If you bought coverage through the Health Insurance Marketplace, you should receive Form 1095-A, Health Insurance Marketplace Statement from your Marketplace by early February. Save this form because it has important information needed to complete your tax return.

If you are expecting to receive Form 1095-A and you do not receive it by early February, contact the Marketplace where you purchased coverage.  Do not contact the IRS because IRS telephone assistors will not have access to this information.

If you benefited from advance payments of the premium tax credit, you must file a federal income tax return. You will need to reconcile those advance payments with the amount of premium tax credit you’re entitled to based on your actual income. As a result, some people may see a smaller or larger tax refund or tax liability than they were expecting.  When you file your return, you will use IRS Form 8962, Premium Tax Credit (PTC), to calculate your premium tax credit and reconcile the credit with any advance payments.

For more information about the Affordable Care Act and your 2014 income tax return, visit IRS.gov/aca or call our office for an appointment 800-560-4NFS – we’re here to help.

Six Tips on Who Should File a 2014 Tax Return

by NFS | Jan 22, 2015 | Archives

Most people file their 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. This year, there are a few new rules for some who must file. Here are six tax 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 28 years old you must file if your income was at least $10,150. 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. New for 2014: Premium Tax Credit.  If you bought health insurance through the Health Insurance Marketplace in 2014, you may be eligible for the new Premium Tax Credit. You will need to file a return to claim the credit. If you purchased coverage from the Marketplace in 2014 and chose to have advance payments of the premium tax credit sent directly to your insurer during the year you must file a federal tax return. You will reconcile any advance payments with the allowable Premium Tax Credit. Your Marketplace will provide Form 1095-A, Health Insurance Marketplace Statement, to you by Jan. 31, 2015, containing 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 $52,427 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 $6,143. Use the 2014 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 Credit.  The AOTC is available for four years of post secondary education and can be up to $2,500 per eligible student.  You 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. However, you must complete Form 8863, Education Credits, and file a return to claim the credit. Use the Interactive Tax Assistant tool on IRS.gov to see if you can claim the credit.

If you need assistance in filing your return, give us a call here at Northeast Financial Strategies Inc. – 800-560-4637.

FREE Comedy Night Tickets Compliments of NFS

by NFS | Jan 21, 2015 | Archives

Northeast Financial Strategies Inc. (NFS) is giving away two (2) pairs of tickets to see the Boston Comedy All-Stars. The show is this Friday, January 23rd, 2015 at the Mansfield Holiday Inn. Doors open at 7:30pm with the show starting at 8:00pm. This show is sponsored by the Plainville, MA Police Association as their annual fundraiser.

Here’s the kicker – the first two people to come down to our new office at Wampum Corner in Wrentham will each get a pair of tickets for FREE. All you have to do is come down…oh, and please check in on Facebook or Tweet that you were here and that you won the FREE tickets!

NFS Opens New Office in Wrentham

by NFS | Jan 21, 2015 | Archives

Northeast Financial Strategies Inc. (NFS) has opened a new office at Wampum Corner in Wrentham.

Still located in the plaza with Cafe Assisi and only feet away from their previous location, NFS has remodeled the office space once occupied by their former neighbors at Century 21, at the opposite end of the building from the Cafe.

We invite you to come down and see our new space. The remodel and move happened just in time for tax season, which opened earlier this week. If you need an appointment to get your tax return completed, just let us know when you come in and we will set one up for you.

We look forward to seeing you soon!

Too Late for 2014 Tax Planning? Guess again.

by NFS | Jan 5, 2015 | Archives

2014 is done, so 2014 tax planning is done too, right? Guess again. Although it’s true that most tax planning strategies are limited after December 31st, there is still a lot you can do to make the tax-filing season cheaper and easier.

Maximize Your Retirement Contributions

If you haven’t already funded your retirement account for 2014, you still have time. Contributions to a Traditional IRA (whether deductible or not) and to a Roth IRA are available until April 15th, 2015. If you are self employed and have a Keogh or SEP-IRA, you have until October 15th, 2015, if you submit an extension of time to file your tax return. Not only will making a deductible contribution lower your tax bill, but your investment will compound tax-deferred. There are specific requirements and limits for each type of account so check with a qualified tax advisor on your specific situation.

Estimated Tax Payments

If you don’t pay enough to the IRS during the year, you may be looking at a hefty tax bill come April. It is possible that you might even owe penalties and interest on top of the tax.  You could avoid any 2014 fourth quarter penalties on underpayment of tax if you submit a payment by January 15th 2015. Try not to over pay the tax however, because the IRS does not pay you any interest on the borrowed money called your refund. It is your money so plan accordingly.

Organization of Your Records

Having your records organized may not save tax dollars, but will make your tax season less stressful. Start by keeping your prior year returns and tax documents in the same place. Collect all of your receipts and documents that may have piled up during the year (hopefully you already have a folder or file called “Taxes” to get you started). When your W2s, 1099s or other tax documents start arriving in the mail, put them all in the same folder and group them together in like categories.  When beginning to prepare your return, work off a checklist or worksheet so you don’t overlook anything.

Take Every Deduction You Are Entitled To

Often times, taxpayers overlook deductions or decide not to take certain deductions because they feel too they are being too aggressive. In order to minimize the amount of tax liability, take every deduction you are entitled to. If your qualified itemized deductions exceed your standard deduction, file with the higher amount. Some well known items that you can itemize are home mortgage interest, real estate taxes and charitable deductions. Other lesser known itemized deductions that you may be entitled to include job hunting expenses, unreimbursed employee expenses, and out of pocket medical expenses. If you are self employed, make sure you write off all of your expenses and be prepared to back these with receipts. One of the items self-employed individuals may be eligible for is the Office-In-Home Deduction. If you conduct business exclusively out of your home office, you may be eligible.

File & Pay On-Time

If you can’t finish your return on time, make sure you file Form 4868 by April 15th, 2015. You will get automatic six-month extension of the filing deadline until October 15th, 2015. On the form, you need to make a reasonable estimate of your tax liability for 2014 and pay any balance due with your request. Requesting an extension in a timely manner is especially important if you end up owing tax to the IRS. If you file and pay late, the IRS can slap you with a late-filing penalty of 4.5 percent per month of the tax owed and a late-payment penalty of 0.5 percent a month of the tax due. The maximum late filing penalty is 22.5 percent and the penalty tops out at 25 percent. By filing Form 4868, you stop the clock running on the costly late-filing penalty.

Seek Help, If You Need It

Low cost, affordable options to prepare and file your returns exist. If you are comfortable doing your own return, go for it. If you become uncomfortable or get in a jam, call us at 800-560-4637 for added confidence and peace of mind. We are here to help.

Happy New Year from NFS

by NFS | Jan 1, 2015 | Archives