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Energy tax credits
Highlights of the Tax Increase Prevention Act of 2014
New Health Care Premium Tax Credit Publication is now available
Important Centers for Medicare and Medicaid Services (CMS) Tax Related Announcements

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IRS begins issuing refunds today.
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Energy tax credits

Get Credit for Making Your Home Energy-Efficient
IRS Tax Tip 2013-48, April 4, 2013
If you made your home more energy efficient last year, you may qualify for a tax credit on your 2012 federal income tax return. Here is some basic information about home energy credits that you should know.
Non-Business Energy Property Credit  
  • You may claim a credit of 10 percent of the cost of certain energy saving property that you added to your main home. This includes the cost of qualified insulation, windows, doors and roofs.

Highlights of the Tax Increase Prevention Act of 2014

The Tax Increase Prevention Act of 2014 (TIPA),
was signed by President Obama on December 19, 2014, which extends for one year over 50 expiring tax provisions relating to individuals and businesses.  
Extended individual provisions include:  
  • Above the line deduction for up to $250 of educator expenses for books, classroom supplies, and computer equipment for eligible elementary and secondary school teachers.
  • Above the line deduction for eligible individuals for higher education expenses including tuition and fees, up to $4,000.

New Health Care Premium Tax Credit Publication is now available

IRS Announces Estimated Tax Relief for Farmers and Fishermen: Attached is Notice 2015-22, which provides for waiver of the addition to tax under section 6654(a) of the Internal Revenue Code (Code) for underpayment of estimated taxes for those farmers and fishermen who received erroneous 2014 Forms 1095-A, Health Insurance Marketplace Statements, and who file their 2014 tax return and pay by April 15, 2015.
IRS Releases Premium Tax Credit Publication:  The long anticipated IRS Publication 974, "Premium Tax Credit (PTC)" has been posted to the IRS website.


Important Centers for Medicare and Medicaid Services (CMS) Tax Related Announcements

This morning the Centers for Medicare and Medicaid Services (CMS) shared three important tax-related announcements we want to pass along to you.Special Enrollment Period
CMS announced a Special Enrollment Period (SEP) for individuals who were unaware of the requirements for enrollment in a health coverage plan that qualifies as minimum essential coverage and who were required to pay the individual shared responsibility payment on their 2014 tax return. The SEP allows taxpayers the opportunity to enroll in health coverage through the Federal Marketplace from March 15 to April 30, 2015.

Business: Repairs vs Capitalized Improvements

Generally, costs that result in an improvement to property must be capitalized and depreciated instead of expensing. Amounts paid for activities that result in any of the following result in an improvement:[Reg. §1.263(a)-3(d)]

  1. A betterment to the property.
  2. A restoration of the property.
  3. An adaptation of the property to a new or different use.

Amounts that do not result in an improvement generally can be expensed as a repair.

Safe harbor for routine maintenance.Costs of regularly scheduled, routine maintenance do not have to be capitalized.

Tax free pension plans

Did you know? Defined benefit retirement plans are exempt from Alabama taxes. If you or someone you know is receiving retirement payments from a Defined Benefit plan, you do not have to pay State of Alabama taxes on it. Click here to see the partial list of tax free plans. If you see your pension plan on the list, tell your tax preparer that your benefits are exempt from Alabama state income taxes. If you live outside Alabama, check with your tax advisor or State Tax Authority to find out if your state also exempts these payments.

Education Tax Credits

The federal government rewards those seeking higher education and job training with some very nice tax laws. These can be confusing, so I will try to help you make sense of these so that you may be better prepared at your tax appointment. First of all let us see what is available.

The American Opportunity (Hope Credit extended) and the Lifetime Learning Credit are education credits you can subtract in full from the federal income tax, not just deduct from taxable income. The Tuition and Fees Deduction will reduce your taxable income.

So you had no health coverage last year...

What is my Filing Status

There are five filing statuses. This seems to cause some confusion so I will try to explain it in a simple manner. (For more detailed information on filing statuses gohere)

  • Single
  • Married filing jointly (MFJ)
  • Married filing seperately (MFS)
  • Head of Household (HOH)
  • Qualifying Widower (QW)

You will file single if unmarried or separated from your spouse, either by divorce or a separate maintenance decree, on December 31. A widow(er) whose spouse died before 2014 is single unless meets the tests for qualifying widow(er).
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