by Ratikanta Mohapatra | Jan 5, 2016 | Blog
While decoding IRS lingo and filing taxes may be the ultimate definition of a good time for some people, for most that means hiring a tax preparer or tax consultant to take care of their annual tax returns. But how can you tell if you need the help of a tax consultant? Is there a specific criteria for doing so? As a start, the following questions should help you figure things out. Do you understand the tax process? Although considered mundane, understanding the basics of the return process is important. Regardless of whether you decide to do your own taxes or get professional help, you will be required to collect all the relevant forms including W-9’s, W-2’s and 1099’s among others that indicate your annual income and wages. Your financial institutions, vendors and employers are responsible for sending them to you by the end of January but if that doesn’t happen, you can track them down yourself. In addition to tax forms, information regarding the deductible expenses that you’ve paid for the entire year such as student loan interest, charitable contributions, home mortgage interest etc. A detailed record of expenses and income is also needed from those who started a business during the year. Knowing the required schedules and forms is essential. The tax return process is a straight forward one for people who are full-time employees who don’t have children or families, an additional source of income and don’t own a home. Such people can easily their tax returns on their own or with the help of some of the tax preparation software available in the market. Those...
by obtaxprep | Oct 27, 2015 | Blog
According to Massachusetts Health Care Reform Law those who are 18 and over are required to obtain health insurance that meets minimum coverage standards. In MA you will be penalized if the state thinks you are eligible to have health insurance and you did not purchase it. The state will charge you each month that you do not have health insurance during the tax year but people who are unable to afford health insurance are not penalized. Here are a few tips to avoid those penalties! Health Insurance Information- Residents and some part-year residents have to file a Schedule HC form with their tax return. This form is important to file since it is used to report information about health insurance coverage during the year. You will receive a Form MA 1099-HC if you have private health insurance and your health insurance carrier should be able to help you fill out a Schedule HC. Affordable Insurance- Check out your state’s health insurance website if you don’t have insurance. The Commonwealth Health Connector is an independent state agency who aids residents living in Massachusetts find affordable insurance and avoid tax penalties. This agency meets the minimum coverage standard with no cost plans and has the state’s approval for their quality. Penalties- The cost of your lack of insurance will be charged though your MA income tax return. Penalties will not exceed 50% of the minimum monthly insurance premium you would have qualified for through Massachusetts Health Connector. Every year the state forms affordability standards that decide which residents or families can afford health care and if you are deemed unable...
by obtaxprep | Oct 13, 2015 | Blog
Summer has come to an end and school is in session! You decided to go back to school so now you have time figure out your finances of whether you have any tax deductibles or have any tax benefits! Here are some tips to get your through this complicated and hectic process and help you lessen your financial burden of heading back to school! Meet with the Boss– Have a sit down with your employer and see if their company has any tuition reimbursement program. This will be the first step to tax relief related to going back to school, as long as you’re staying with your current job while attending classes, up to $5,250 of the assistance you receive can be completely tax free. Tax Credits– Tax deductions are key to lessening your financial burden, but before filing taxes check out the tax credits. The American Opportunity Tax Credit might offer more of a tax break, they are for students seeking a four year college degree. You need to be taking more than one class to be eligible for the American Opportunity Tax Credit but the Lifetime Learning Credit allows you to only take one class to be eligible. School Tuition Deduction- Chances are you can get deducts for costs in tuition, books, and other fees that might apply as an unreimbursed employee expense. Congress might extend the tuition and fee deduction that is worth up to $4,000 in benefits depending on your income. Optional fees that aren’t course requirements or new athletic gear are non-deductibles so it would not be about of the benefits. Congress usually extends...
