The Affordable Care Act, or ACA, goes into effect on January 1, 2014. Most people are aware that the ACA requires all U.S. citizens to purchase health insurance, but they may not know the way that the provisions of the ACA may affect their income tax liability. Tax professionals who will be preparing tax returns for 2013 will not have to deal with the implications of the ACA yet, since the law will affect returns in the 2014 tax year and after. However, understanding the Affordable Care Act can help preparers to offer advice and suggestions to their clients.
College graduates and students who are repaying their student loans may qualify to claim a tax deduction for the interest they pay each year. Many student loans are subsidized by the federal government to give students a tax incentive to return to college. While the payments for the loans themselves are not tax-deductible, the interest may be. This can be used on both subsidized and unsubsidized loan interest.
Members of the United States Armed Forces and their families may be eligible for tax deductions and savings under the Military Family Tax Relief Act. This provision was specially designed to provide financial assistance to military personnel, especially assistance that allows them to take advantage of additional tax credits because of the itinerant nature of their work. To claim these provisions, though, members of the military should become familiar with all the benefits they may qualify for.
The Internal Revenue Service has allowed for disabled taxpayers to receive several breaks, deductions, and credits on their income tax returns. In some cases, these credits are available simply because taxpayers meet certain standards regarding age and disability. Some other tax breaks must exceed a certain amount or be used for a specific purpose in order to be considered qualified expenses.
Taxpayers who own rental property are subject to special tax considerations when it comes to reporting their rental income. The good news is that the agency allows these taxpayers to claim several expenses as tax deductions against this income so that they can reduce their taxable gain. In order to take advantage of these deductions, taxpayers must keep good records of their income and expenses to document their claims. Here are a few rental income tips to help taxpayers keep up with their obligations to the IRS.
In 2010, the U.S. government instituted a new excise tax that applied only to establishments that provide indoor tanning. This additional charge, called the Indoor Tanning Services Excise Tax, took effect on July 1, 2010, and was part of a government program to increase revenue and discourage the practice of indoor tanning, which has been shown to pose substantial health risks. Establishments that offer indoor tanning are now required to submit a 10 percent tax based on their revenues from their businesses.
In some cases, employers who hire workers may find that their employees actually meet the standards for independent contractors. If this is the case, these business owners may be submitting payroll taxes on their employees' income when it is not legally required. The good news is that the IRS now allows these employers to change the status of their workers for tax purposes if they meet certain conditions. The arrangement for this change is called the Voluntary Classification Settlement Program (VCSP).
Adjusted gross income (AGI) is one of the most important figures on Form 1040. This amount determines your applicable tax rate and, by extension, your actual tax liability for the year. However, many taxpayers are unfamiliar with how adjusted gross income is calculated, which means that they may not be aware of how their AGI amount fluctuates from year to year. Knowing how to calculate your AGI can help you prepare for your taxes based on the potential change in the amount of income tax you owe.
College students have been using work study as a way to earn additional income for school for many years. While work study provides a regular stream of income, it is not actually classified as a job because it is a form of financial aid provided for needy students. Despite this classification, though, receiving work study income can have an impact on your federal income tax liability at the end of the year. For this reason, it's important to know why work study is significant and how to include this school related tax on your tax form.
If you follow financial news, you may have the heard the phrase "tax-free bond" used quite often. Some news reports discuss that investors are purchasing tax-free bonds in droves to take advantage of rising interest rates. What is a tax-free bond? Why would it be beneficial for the interest rate on these bonds to rise? Are there any risks in purchasing tax-free bonds? Do I need assistance managing tax free bonds?
