Category Archives: Uncategorized

Health Savings Plan Distributions & 1099-SA

If you have made a regular contribution to a Health Savings Account (HSA), an Archer MSA or a Medicare Advantage MSA Plan, for yourself or on behalf of another (as a trustee or custodian) and have distributions to report, you must file a 1099-SA. In fact, if you have more than one plan, a separate return must be filed for each plan type. There are general instructions from the IRS for “Certain Information Returns” (https://www.irs.gov/pub/irs-pdf/i1099gi.pdf) posted on the IRS website. These instructions include who must file, when and where to file, electronic reporting, corrected and void returns as well as

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Did you receive a state or local refund last year?

Those nice tax refunds you received after filing your state and/or local returns last year might be considered taxable income, which is why you must enter the information as you complete your federal return this year. But don’t panic; state and local tax (SALT) refunds can only be counted as income for taxpayers who itemized deductions on last year’s federal return.  If you claimed the standard deduction last year on your federal tax return, any state or local refund you received is not taxable and you don’t have to report it. Why the different treatment? It’s because if you itemized deductions last

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Do I need to report my Social Security benefits?

Depending upon your total income, social security benefits may be considered taxable income either entirely or in part. If you receive social security benefits and are required to file a tax return, you must include all the income that you receive on your return. If social security is your only source of income then you are probably not required to file a tax return. However, some taxpayers must still file even if none of their social security benefits are taxable. In other cases, it may be advantageous to file a return even if you are not required to do so.

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Who can take the Retirement Savings Contributions Credit? (Savers Credit)

If you contributed to one or more retirement savings accounts during the tax year, you may be eligible to claim the saver’s credit. Saving for retirement can sometimes be challenging, but the IRS makes it a little easier for certain taxpayers with low or moderate income. If you meet specific qualifications and contribute money to a qualified retirement savings account, you may be able to reduce the amount of tax you owe by claiming the Retirement Savings Contribution Credit (also known as the saver’s credit).  Contributions to many types of retirement savings accounts can be counted toward the saver’s credit,

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How to Report Gambling Winnings with a Form W-2G

Do you participate in fantasy sports leagues, sometimes buy raffle tickets or occasionally play cards for money? If so, you may have ‘gambling winnings’ even if you don’t consider yourself a gambler. Any type of prize, including cash, that you win by an activity that the IRS classifies as gambling must reported on your tax return and counted as income.  For the purposes of tax reporting, gambling activities include: Lotteries Raffles Drawings Horse races Casinos Wagering Card games Bingo, Keno and other games Sports betting (including fantasy football) All other types of betting, wagering or gambling For non-cash prizes and

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How Do I Claim Refundable Credits After Disallowance?

Sometimes a taxpayer’s claim for a refundable tax credit is reduced or denied. If the IRS rejected or reduced your claim for certain refundable tax credits, you will need to complete and submit the Form 8862 along with your tax return in order to claim any of these credits again.  Typically, you are required to include the Form 4868 in the first filing you after a disallowance. Then, if the IRS accepts your return and allows you to claim the credit that was previously disallowed, you do not need to file this form in subsequent years unless the IRS disallows

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What is an IRS Issued Identity Theft PIN (IP PIN)?

Identity Protection Personal Identification Numbers (IP PINs) are typically issued to people who are the victims of identity theft or others whose Social Security numbers may have been compromised through a data breach or other exposure. Some people receive an invitation to apply for an identity theft PIN because the IRS has identified them as potential victims of identity theft.  The objective of this is to reduce the likelihood that someone successfully files a fraudulent tax return using your Social Security number. It can help confirm that you are the individual who is attempting to file and not someone else. You

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Who Can Take the Credit for the Elderly or Disabled (Schedule R)?

If you are over the age of 65 at the end of the tax year or if you are totally and permanently disabled, you may be eligible to claim the Credit for the Elderly or the Disabled.  Many taxpayers who are over 65 or disabled qualify for a tax credit worth between $3,750 and $7,500, but not everyone who experiences disability or meets the age requirement is eligible to claim it. To qualify for the credit for the elderly or disabled, you must: Have reached age 65 on or before the last day of the tax year (As a practical

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Did you collect unemployment compensation from a state or local government assistance program?

Unemployment compensation can provide valuable relief when taxpayers are experiencing temporary job loss, but there’s often an unpleasant surprise that follows these payments: This income is taxable at the federal level. If you don’t have taxes withheld from the payments, you may owe a big tax bill when you file your return. If you received unemployment payments during the year you should receive Form 1099G, Certain Government Payments. The amount of unemployment compensation you received from all sources, including federal, state and local government assistance programs, will be shown in Box 1 of this form; the amount of federal tax that

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What is the Recovery Rebate Credit?

Many taxpayers received Economic Impact Payments during 2020 and 2021 in response to difficult economic conditions caused by the COVID-19 pandemic. If you have not yet received the first or second stimulus payments from 2020, you may be eligible to claim the Recovery Rebate Credit on your 2020 tax return. Additionally, if you did not receive the third payment from the 2021 stimulus, you should be able to claim it on your 2021 tax return. Due to the coronavirus epidemic, the U.S. Treasury Department issued an Economic Impact Payment (EIP) to eligible taxpayers twice during the 2020 tax year. The amount

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