Because your out-of-pocket medical and dental expenses can impact your taxes, keeping good records during the course of the year is important.  Taxpayers can claim medical expenses paid for in 2016 if they itemize deductions of their federal tax return--meaning the taxpayer has determined overall deductions are larger than the standard deduction.  For 2016, the standard deduction for married filing jointly is $12,600 and $6,300 for individuals.

Qualifying Expenses:  Most medical and dental costs paid out-of-pocket, including insurance premiums, can be deducted.  Long-term care insurance, in some cases, may also qualify.  For those instances where you are traveling longer distances for health care, keep track of the mileage.  The 2016 medical rate is 19 cents per mile.

Note:  You cannot claim deduction for expenses already covered from a Health Saving Account or Flexible Spending Arrangement.

Call our firm at 815.842.1112 to set up your tax appointment today.  We can and will guide you through your medical itemized deductions as well as other deductions for which you may qualify.

It has been announced that the Internal Revenue Service will start accepting and processing 2016 federal individual income tax returns this year.   You will have until Tuesday, April 18, 2017 to file your 2016 return.

​Expect refund delays this year as the IRS will be enforcing the Protecting Americans from Tax Hikes (PATH) Act, which requires the IRS to hold returns which claim Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) as a fraud prevention mechanism.  Most refunds will not be issued until the week of February 27th.

​Please call our firm at 815.842.1112 or 815.945.2611 to help with your tax needs!  We look forward to your call.

Dear Clients,

Today I received a call from an unknown area code on my cell phone which I assumed was a telemarketer, but much to my surprise, the caller left a voicemail.  Upon opening my voicemail, a stern voice indicated to me via a recording, that I was in the process of being sued by the IRS.  Even this attorney, who stays abreast of IRS tax scams, was initially taken aback my the severity and tone of the "caller".  

​If you have had a similar experience to me, stay calm and read on....

​(1)  The IRS reports the most common scams and educates consumers accordingly online. 
​https://www.irs.gov/uac/tax-scams-consumer-alerts
This tax year tax fraud has been rampant.

​(2) Keep in mind, if you have somehow found yourself subject to an IRS audit or are accountable for back taxes, the IRS will have sent you multiple written letters well before any litigation has commenced.  The IRS does not use automated voicemail to communicate its dissatisfaction with the taxpayer.   It is also helpful to utilize the internet to determine if the caller's number is actually an IRS line.  In my case, it turned up as "unknown". 
​
​(3) Remember, the idea behind extortion is this, get the individual afraid and then extort that fear in order to get money.  This is not the way of the IRS.  In the event you owe money, you will have received notices indicating in detail the issues with your tax returns and your options to pay any deficits.  None of those options will include a lump sum payment by a certain date wired to a bank account or will be accompanied by the immediate threat of litigation.

​(4)  Call Caughey, Legner, and Freehill - 815-842-1112.  As your tax preparers, we can educate you on the realties of whether you would be exposed to tax penalties or tax litigation based on the nature of your returns.

​(5)  Finally, the IRS provides a fraud hotline: 1-800-366-4484.  When in question, call it. 


​As for this tax payer, I will lift my head up high, double check my credit reports to make sure nothing strange is happening with my social security number, and attempt to live a life free from fear of the IRS.

Sincerely,
​Steven T.  Mann

Medical Expenses can be a valuable deduction if you qualify for itemized deductions (see our blog post of February 17th, 2016).  Potential deductions include:
 

1. The costs of diagnosing an illness.
2. The costs of prescription drugs.
3. The costs you pay for insurance premiums.
4. Long term insurance costs.

Keep in mind that travel costs to and from doctors and hospitals are eligible for deductions.  For more information on medical and other deductions, please contact CAUGHEY, LEGNER, & FREEHILL today.

If your creditor has cancelled debt, it is generally considered income to you with certain limited exclusions for home montages, loan modifications, and refinanced mortgages.  Please contact us today if a lender has cancelled debt for you in 2015. 

We are often asked whether or not the taxpayer qualifies for itemized deductions.  The basic standard deductions are the following:

-  Single $6,300
-  Married Filing Jointly $12,600
-  Head of Household $9,250
-  Married Filing Separately $6,300
-  Qualifying Widow(er) $12,600

Your itemized deductions would generally take into account the following:

- Home mortgage interest
- State and local income taxes or sales taxes
- Real estate and personal property taxes
- Gifts to charities
- Unreimbursed medical expenses
- Unreimbursed employee business expenses

Generally if the above categories puts you in a position where you itemized deductions are larger than the standard deduction, it is important to itemize.  Please call us at 815.842.1112 with any questions.