TAX TIPS for the 2016 TAX FILING SEASON:
- Get organized before your tax appointment – use a large envelope or file folder to accumulate tax documents as they arrive.
- Protect your identity – If you received an Identity Protection PIN, or IP PIN, in the past, then you must provide this number on your tax return not only the current year but all future tax returns. An IP PIN is a six-digit number assigned to a taxpayer that helps prevent fraudulent returns from being filed under your Social Security number. Remember, the IP PIN is critical in getting your return accepted by the IRS. This is no ordinary PIN, as it changes every year. If you do not receive the notification in the mail, you will need to go to the IRS website to retrieve it. https://www.irs.gov/individuals/retrieve-your-ip-pin
- Get what is due to you – According to the IRS, 1 out of every 5 workers fails to claim the very valuable earned income tax credit. The amount of EITC you receive is based on income and the size of your family. You must file a return in order to receive the credit.
- Decluttering reaps a tax break. It you itemize on Schedule A, you can get a nice credit for donating items you no longer need. Make sure it is a qualified charitable organization, get a receipt and write down the items you donate. To help determine Fair Market Value, you can visit http://www.dcgoodwill.org/wp-content/uploads/2014/05/dcgoodwill-irs-donation-value-guideweb.pdf as a guide. If your non cash donation items are more than $500, we will need to complete a special tax form.
- Cash in on Education – Higher Education cost can provide tax savings for you. There are various requirements that may limit the benefit but we will help you through taking the best credit. YOU SHOULD RECEIVE A 1098-T Tuition Statement from your school PLUS remember to list all other expenses for supplies, books, etc.
- Get Health Coverage Forms – Most filers who are covered through an employer sponsored plan but need to indicate they had coverage for the entire year. If you have or had insurance thru the Marketplace, it is a bit more complicated. We may need to complete forms 8965 and 8962. No Worries….Just bring any forms received – 1095-A, 1095-B or 1095-C
- Gifting – You are allowed gifting up to $14,000 in cash, property or gifts to anyone. If it is over, then you need to report the gift on Form 709. A married couple could donate $28,000 to an individual without any special reporting.
- The person receiving the gift does not have to report anything unless you receive over $100,000.
- Let’s make it easy – electronically filing, using direct deposit for a refund, direct pay for a balance you owe. PLEASE MAKE SURE YOU KEEP A COPY OF YOUR FILED RETURN – IT IS YOUR RESPONSIBILITY.
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