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.
The IRS has recently published its Tax Tip 2016-15 with emphasis on IRS issues applicable to farmers:
1. Crop insurance counts as income, generally, in the year the insurance payments are received.
2. Farm income averaging: You may be able to average some or all of the current year's farm income by spreading it out over the past three years. This may cut your taxes if your farm income is high in the current year and low in the prior three years.
See Publication 225, Farmer's Tax Guide.
Please call Caughey, Legner & Freehill for your tax appointment today!
The IRS offers a Premium Tax Credit (PTC) for certain people who enroll, or whose family member enrolls, in a qualified health plan offered through a Marketplace. In order to claim such credit, the taxpayer must file a Form 8962. Call our office at 815.842.1112 to determine whether you qualify for this credit. We look forward to helping you navigate the complicated tax laws.
We here at Caughey, Legner, & Freehill wish all of you the happiest of holidays and look forward to meeting your legal needs in the upcoming year.
Identity Theft is a common occurrence this time of year. For tips and advise on how to combat this phenomenon, we encourage you to read some help tips from the Internal Revenue Service: Taxes. Security. Together.
Check out this new cool article on Unmanned Aerial Vehicles and the state of the law from CLF attorney Steven Mann.
Two penalties apply in the event you fail to file a federal tax return: 1) A failure-to-file penalty and 2) a failure-to-pay penalty for paying late (if owed). The failure-to-file penalty is generally 5% of the unpaid taxes for each month or part of a month a tax return is late, not to exceed 25%. The failure-to-pay penalty is generally 0.5% per month of your unpaid taxes up to 25%. Two takeaways:
Tip #1: File your return even if you can't pay or file for an extension.
Tip #2: Call our firm at 815.842.1112. We may be able to help guide you in the event you can show reasonable cause for not filing or paying on time.
Doing nothing results in accruing penalties which could impact you financially and could ultimately result in tax liens. We can help you! Call us today.
All of us here at Caughey, Legner, & Freehill hope that you have had a successful tax season. Overheard on the radio on my commute in this morning....only 1 in 4 calls will make it through to an actual IRS agent today. If you are a procrastinator, and have waited until today to file your return, we can still help you. Please call us today with any questions. 815.842.1112.
Steven T. Mann
Did you know you may qualify for an adoption tax credit of up to $13,190 per child and deduct expenses related to the adoption? Please call our offices today at 815-842-1112.
The tax filing deadline approaches quickly. Please contact us today to schedule your tax appointment.
Do you have medical and dental expenses for 2014? These expenses can apply towards your itemized deductions if they exceed 10 percent (10%) of your adjusted gross income. Although you cannot count the medical expenses paid from a Health Savings Account (HSA), all others medical expenses could qualify, including costs paid out of pocket for insurance premiums. Please call us today to discuss whether these types of expenses may or may not pertain to your situation. You may also consult IRS Pub. 502 for more information.
We thank you for visiting our law blog. The comments and articles written in this blog are not meant to replace the advice of a tax attorney or CPA. We also provide updates on social media.