Tax Time Tips For Tax Year 2015
Ok, well, you know what time it is – right? It’s filing season, and here are just some of this years tax changes:
Health Care Individual Responsibility:
Health care individual responsibility payment has increased. If you or someone in your household did not have qualifying health care coverage, or did not qualify for a coverage exemption for one or more months of 2015, the amount of your shared responsibility payment may be much higher this year as opposed to last.
For Individuals With Disabilities:
For individuals with disabilities, there is a new type of savings account. For 2015, those who contributed up to 14,000 may use these distributions tax free if used to pay the beneficiary’s qualified disability expenses.
Due Date Of Return:
If Paying An Amount Due:
This year, you must file your tax return by April 18, 2016. It is extended this year due to “emancipation Day Holiday in the District of Columbia even you do not reside in D.C. If you are a Massachusetts or Maine resident, you have until April 19, 2016 due to the Patriot’s Day Holiday.
If Expecting a Refund:
Due Dates of Returns when expecting a Refund is within three years of the original due date of the Return.
Public Safety Officer’s Death:
Certain amounts received because of the death of a public safety officer are non-taxable.
Certain charitable contributions:
There is a special rule for cash contributions made between Jan 1,2015 and April 15, 2015 to benefit families of slain New York detectives Wenjian Liu or Rafael Ramos.
The New “myRA” account:
The Department of the Treasury now offers a “starter retirement account” where you can have your refund directly deposited.
And, More Changes:
- The Health Coverage Tax Credit has been reinstated retroactively to Jan 1, 2014.
- Additional Child tax credit:
You cannot claim the Additional Child Tax Credit if you also file Form 2555, Foreign Earned Income or Form 2555-EZ, Foreign Earned Income Exclusion
- Social Security beneficiaries can go online and obtain a variety of information from the SSA website
- One IRA Roll-Over Per Year: Application of a one-rollover per year limit for IRAs. There are exceptions, but please check before rolling over more than one IRA to another, or the same IRA within a one year period.
Expired Tax Benefits:
A number of tax benefits have expired. Among these are:
- Tuition and fees deduction
- Educator Expenses
- State and Local General Sales Taxes
- An exclusion from income of qualified charitable distributions from IRAs
- Credit for certain non-business energy property
- Deduction for mortgage insurance premiums.
You will have to check whether legislation has extended any of these tax benefits along with other tax benefits when you file. Otherwise, you may have to file an Amended Return if you find that any were reinstated and you “could” claim any in order to receive a credit.
If Self-Preparing Tax Returns:
For those who prepare their own taxes, and want to know more about the tax code behind each line item, your best bet is Publication 17. It explains everything going on with the year’s tax returns, and it points you to other Forms and Publications that may be required for further information as well.
Tax Returns and filling them out is, generally speaking, not that difficult. It always surprised me that some college kids wouldn’t even make the effort to fill out a 1040-EZ , which is just one page, to show income from a part-time job. Some of the problems arise when returns become a bit more complicated. For instance, when people are trying to decide whether to use their standard deduction or if they should go with itemized – generally when they own a home and/or have high medical bills. Some software programs allow you to prepare both to see which way may provide more benefit.
Other problems arise when people, such as day traders, in particular, don’t keep accurate records of their trades. But, luckily, programs are getting much better, and the companies that provide the required end of year reports are also getting much better identifying the information needed.
I have, personally, prepared tax returns for others over the years, and lately, I use Turbo Tax. I have used Tax Cut, and others, but hey, when there’s a sale on Turbo Tax, that’s the one I’ll usually buy.
Since it’s that time again, I’ve been looking for deals, and I have come across a few sales on Amazon. I am listing the links below. I have no idea how long these sales will run on these programs, but, truthfully, it sure beats filling out a return the old fashioned way – by hand!
Time to Pay-up! But, look at it this way: The quicker you get it over with, the quicker you can go have a beer…
To Your Wealth!
Great article thanks!
Thank you for the help. This year I prepared for tax season by myself and I realized how disorganized I am. I may have to use a program to help me stay organized, as you mentioned. Do you think that or working with a tax preparation service would help me be more ready next year?
Hi Justin, Yes, organizing and staying organized is definitely worth it. When I was preparing returns in the private sector, we charged more for those who came in with boxes of receipts and boxes full of loose papers, etc. – for sure. So, yes, if you’re a paying customer, it’s definitely worth your while to get organized. You’ll learn more about what’s important, and save money. As for using a tax prep service, it really depends.
If you’re the type of person who just doesn’t want anything to do with taxes, learning about them, or anything along those lines, then, yes, obviously it would be in your best interest to use a service. There are many many people out there who would rather pay for the service, and some don’t even mind paying extra when they do come in with their boxes…. 🙂 However, with that stated, I will remind those who would rather pay for a service that you must also understand your tax return when you sign it.
The IRS holds each taxpayer responsible for his/her tax return, so blaming any type of mistake on your tax return service doesn’t get anyone too far. Conversely, if there are tax preparers out there who may be reading this, please remember that it is your responsibility to explain each tax return to your paying customer. Asking detailed questions during the interview and going over details at the end should ensure that the return is as accurate as possible with the information provided.
Happy Tax Season!