Juror 26 claimed that prior to deliberations she had heard three Black jurors were going to find the defendants guilty because they were “rich. white, and entitled”. – Forbes – Taxes
Marie Sapirie considers the implications of a bill proposed by Senate Finance Committee member James Lankford, R-Okla., which would require the Office of Information and Regulatory Affairs to review tax regulations. – Forbes – Taxes
At a glance:
You will receive Form 1095-A if you were enrolled in a Marketplace plan from healthcare.gov during the tax year.
Save this form with your other important tax records.
Form 1095-A will help you claim the premium tax credit if you qualify.
You will receive the 1095-A tax form if you bought health insurance through the government Health Insurance Marketplace. Form 1095-A is a Health Insurance Marketplace Statement that comes in the mail, and you’ll need it to accurately file your 2023 tax return. This form should arrive in your mailbox by mid-February 2024.
Read on to get answers to seven of the most common questions about Form 1095-A.
You need Form 1095-A to complete IRS Form 8962, Premium Tax Credit (PTC).
This information provided on this form will help you complete your income tax return, claim premium tax credits, and adjust any tax credit payments.
While Form 1095-A is not filed with your tax return, the information is needed to complete Form 8962, Premium Tax Credit. Form 8962 should be filed as part of your tax return.
If you use TaxAct® to prepare your return, our program asks you questions and completes Form 8962 for you if required.
To qualify for the premium tax credit, you must meet the following criteria:
You were enrolled in health insurance coverage through the Marketplace for at least one month of the calendar year.
You did not qualify for an employer-sponsored plan considered affordable for your income level.
You were not eligible to enroll in a government program such as Medicare, Medicaid, or CHIP.
You fall within certain household limits (more on that later).
No one else can claim you as a dependent on their tax return.
Your filing status is not married filing separately.
The premium tax credit phases out for those earning 100% to 400% of the federal poverty level. However, if you live in Hawaii or Alaska, the income limits are higher.
If your income is above the upper limit, you don’t qualify for the premium tax credit.
The following income limits apply to residents of the 48 contiguous states for tax year 2023, based on family size:
Family size 1: $14,580 up to $58,320
Family size 2: $19,720 up to $78,880
Family size 3: $24,860 up to $99,440
Family size 4: $30,000 up to $120,000
Family size 5: $35,140 up to $140,560
Typically, the lower your income, the more help you receive through a premium tax credit.
You can reference the 2023 poverty guidelines here for all family sizes and income ranges, including different figures for Hawaii and Alaska residents.
To determine your household income for this purpose, start with your adjusted gross income (AGI).
Your adjusted gross income includes all your taxable income, reduced by “adjustments,” including deductions and retirement plan contributions.
Non-taxable Social Security benefits
Tax-exempt interest income
Excluded foreign income
TaxAct calculates your household income and allowable credit for you making it easy to determine your income.
If your income was more than you expected during a year when you received advance credit payments, and your income is above 400% of the federal poverty level, the entire amount of advance credit payments you received must be paid back.
However, if you made more than you expected to, but your income is still below 400% of the federal poverty level, there is a repayment limitation on the amount you must pay back.
For example, if your income is less than 200% of the federal poverty level ($29,160 for an individual in 2023), you will not have to pay back more than $350 of advance credit payments as a single filer (and no more than $700 for other filing statuses).
If your income is less than 300% of the federal poverty level, the maximum amount you will pay back as an individual is $900.
If your income is less than 400% of the federal poverty level, as an individual you won’t have to pay back more than $1,500.
The post 7 FAQs About Form 1095-A, Health Insurance Marketplace Statement appeared first on TaxAct Blog.
– Tax Tips and Tax Planning Resources | TaxAct Blog
Updated for 2023.
Filing taxes can be overwhelming, and sometimes, we overlook important things in the chaos. Let’s review common pitfalls taxpayers encounter and suggest some proactive measures you can take to avoid making the same mistakes. Not only should this give you a smoother tax filing experience, but it could also save you money.
If you must file an income tax return, be sure to file it on time to avoid a penalty for filing late. There can be serious consequences if you don’t file taxes. If you are missing important tax information when your return is due, file for an extension. Alternatively, you can also file a return with the best information you have and amend it later if necessary.
Even if you have tax due that you cannot pay immediately, file your return anyway. The IRS imposes separate penalties for filing late and paying late, so it’s better to at least file your return on time.
If you’re not required to file, it’s a good idea to prepare a return anyway. You may be entitled to money back from the government through various refundable tax credits and other tax benefits, which you can only claim if you file a return.
It’s not too late to contribute to some retirement plans. You have until Tax Day, April 15, 2024, to make contributions of up to $6,500 to an IRA (or combination of traditional and Roth IRAs) for the 2023 tax year.
If you are 50 or older by the end of 2023, you can contribute up to $7,500 to your IRA(s).
You may receive Form 1099-NEC for freelance work you performed or Form 1099-S for proceeds from the sale of real estate transactions. It’s essential to report all the income you earned throughout the year on your return, regardless of the source.
The IRS also receives copies of the 1099 forms sent to you. And while the agency may not notice immediately if you make a mistake and don’t report income for which you received a Form 1099, they will eventually. If it appears you did not report all your income, you’ll get a notice from the IRS with a balance due.
Making noncash contributions to a charity can be a smart move. It helps the charity, plus you generally can claim a deduction for the item’s value.
What’s not a smart move — taking a larger deduction for your contribution than you should. That mistake may cause the IRS to disallow part of your deduction. As a result, you could owe additional tax plus interest and penalties. The resulting penalty can be significant if you were substantially off in your estimate. Always be sure to report contributions as accurately as possible.
Before you file your return this tax season, review the names and Social Security numbers for you, your spouse, and the dependents you claim for various credits and benefits. Make sure each name is spelled exactly the same as it is on the Social Security card or other official identifying documents. Even a simple typo in a name or SSN can cause significant delays and headaches down the road, so it’s good practice to triple-check names and numbers for accuracy before submitting your return.
Another good number to triple-check is the bank account number where you want the IRS to send your tax refund. If even one digit is off, someone else could get your tax refund, or it could be sent back to the IRS.
Sometimes, using a certain filing status can save you money. For example, if you’re married and don’t have a reason to file separately, you’ll often pay less total tax by filing jointly. If you are single and have at least one dependent, you’ll likely do better filing as head of household than as single, assuming you meet the qualifications.
TaxAct® can lead you through filing status qualifications and help you select the best one for your situation.
As you file this year, note any changes you can make this year to help you save money during next year’s tax season. Was there a tax credit or tax deduction you missed out on this year that you could take steps to qualify for in 2024? Can you adjust your withholdings even further using our Refund Booster1 to get the refund amount you desire? Use your 2023 return to plan your best 2024 tax year possible.
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6Tax Filing Tips Parents Need to Know
The post 8 Tax Filing Mistakes to Avoid This Year appeared first on TaxAct Blog.
– Tax Tips and Tax Planning Resources | TaxAct Blog
Updated for tax year 2023.
At a glance:
Stock options and ESPP plans generate income in two categories: ordinary income and capital gains or losses.
Calculate your gain or loss by subtracting your adjusted cost basis from the sales proceeds.
Check your 1099-B for accuracy, compare it to your investment records, and adjust if necessary.
After entering my info into Form 1099-B, I think I’m getting double taxed on the sale of my employee stock options and ESPP shares. I haven’t adjusted the basis from what is shown on my Form 1099-B, but it seems like maybe I’m supposed to make an adjustment because the proceeds already appear as income on my W-2. What do I do here?
Employers often compensate employees with benefits other than wages. Stock options and employee stock purchase plans (ESPP) are increasingly popular in compensation packages.
Generally, these plans offer employees stock in their company at either no charge or a discounted price. On the surface, getting stock units for little to no cost sounds like a great deal, but the IRS doesn’t let this income go unnoticed.
These plans generate income in two categories: ordinary income and capital gain/loss income.
Any capital gain or loss is determined at the time you sell the stock. The amount is determined by taking the sales proceeds minus your adjusted cost basis. Your adjusted cost basis generally consists of two amounts: compensation income and acquisition cost. The acquisition cost is the price you pay to acquire the stock.
Benefit plans differ in terms and guidelines for receiving stock units. Some plans award the stock to you at no cost, in which case your acquisition cost is $0. Other plans allow employees to purchase stock at a discounted price. The discounted price you pay for each unit is your acquisition cost.
Any compensation income amount is essentially the benefit you received at the time of purchase. If the stock was awarded to you at no cost, then your compensation income is the fair market value (FMV) of the stock you received at no charge. If you purchased the stock at a discount, the discount is the compensation income.
You will receive a Form 1099-B in the year you sell the stock units. This form will be used to report any capital gain or loss resulting from this transaction on your tax return. You should review the cost basis amount on Form 1099-B and compare it to the adjusted cost basis amount in your investment records. If the cost basis amount reported on Form 1099-B does not match your adjusted cost basis per your records, you will include adjustment code B on your tax return.
Compensation income reported on Form W-2 is likely not included in your cost basis on Form 1099-B and will require an adjustment amount using code B. If the cost basis amount was not reported to the IRS on Form 1099-B, enter your cost basis on your tax return based on your personal investment records.
You will need to enter the property description, date acquired, cost or other basis, date sold, sales proceeds, and any federal income tax withheld.
Note: The 1099-B form you received may or may not report the date acquired or the cost basis. This information is maintained by you and is needed to complete the proper reporting of the transactions on Schedule D.
The post If Income from ESPP/ISO Shares Sold Appears on W-2, Do I Need to Adjust Basis from Form 1099-B? appeared first on TaxAct Blog.
– Tax Tips and Tax Planning Resources | TaxAct Blog
Boomers and their elders control $93 trillion, or two-thirds of America’s household wealth. Forbes 400 members Phil Knight, Charles Koch, Barry Diller and Harold Hamm give a master class in how to make sure your money goes to charity and children. – Forbes – Taxes
Understanding how this credit works is essential in order to take advantage of the savings it can provide. – Forbes – Taxes