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Getting Advance Payments of the Premium Tax Credit? Remember to Report Changes in Circumstances
IRS Provides Tax Relief to Houston Area Storm Victims; Tax Deadline Extended to Sept. 1
WOTC Deadline June 29
Your Social Security Benefits May be Taxable
Find Out More about Income-Based Health Coverage Exemptions
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Getting Advance Payments of the Premium Tax Credit? Remember to Report Changes in Circumstances

If you purchased 2016 health care coverage through the Health Insurance Marketplace, you may have chosen to have advance payments of the premium tax credit paid to your insurance company to lower your monthly premiums. If this is the case, it’s important to let your Marketplace know about significant life events, known as changes in circumstances.
These changes – such as those to your income or family size – may affect your premium tax credit. Reporting the changes will help you avoid getting too much or too little advance payment of the premium tax credit. Getting too little could mean missing out on premium assistance to reduce your monthly premiums. Getting too much means you may owe additional money or get a smaller refund when you file your taxes. If your income for the year turns out to be too high to receive the premium tax credit, you will have to repay all of the payments that were made on your behalf, with no limitation.

Changes in circumstances that you should report to the Marketplace include:

an increase or decrease in your income
marriage or divorce
the birth or adoption of a child
starting a job with health insurance
gaining or losing your eligibility for other health care coverage
changing your residence
Changes in circumstances may qualify you for a special enrollment period to change or get insurance through the Marketplace. In most cases, if you qualify for the special enrollment period, you will have sixty days to enroll following the change in circumstances.

IRS Provides Tax Relief to Houston Area Storm Victims; Tax Deadline Extended to Sept. 1

Texas storm victims, including those in the Houston area, will have until Sept. 1, 2016 to file their returns and pay any taxes due, the Internal Revenue Service announced today. All workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization also qualify for relief.
The tax relief postpones various tax filing and payment deadlines that occurred starting on April 17, 2016. As a result, affected individuals and businesses will have until Sept. 1, 2016 to file their returns and pay any taxes due. This includes 2015 income tax returns normally due on April 18. It also includes the April 18 and June 15 deadlines for making quarterly estimated tax payments. A variety of business tax deadlines are also affected including the May 2 and Aug. 1 deadlines for quarterly payroll and excise tax returns.
In addition, the IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due on or after April 17 and before May 2 if the deposits are made by May 2, 2016

WOTC Deadline June 29

Businesses and tax-exempt organizations planning to claim the work opportunity tax credit (WOTC) for wages paid to eligible workers have until June 29 to request the required certification. Employers should use Form 8850 to request certification from their state workforce agency.

Your Social Security Benefits May be Taxable

If you receive Social Security benefits, you may have to pay federal income tax on part of your benefits. These tax tips will help you determine if you need to pay taxes on your benefits.
Form SSA-1099. If you received Social Security benefits in 2015, you should receive a Form SSA-1099, Social Security Benefit Statement, showing the amount of your benefits.

Only Social Security. If Social Security was your only income in 2015, your benefits may not be taxable. You also may not need to file a federal income tax return. If you get income from other sources you may have to pay taxes on some of your benefits. Tax Formula. Here’s a quick way to find out if you must pay taxes on your Social Security benefits: Add one-half of your Social Security to all your other income, including tax-exempt interest. Then compare the total to the base amount for your filing status. If your total is more than the base amount, some of your benefits may be taxable. Base Amounts.

 The three base amounts are:
◦$25,000 – if you are single, head of household, qualifying widow or widower with a dependent child or married filing separately and lived apart from your spouse for all of 2015
◦$32,000 – if you are married filing jointly
◦$0 – if you are married filing separately and lived with your spouse at any time during the year

Find Out More about Income-Based Health Coverage Exemptions

The individual shared responsibility provision requires you and each member of your family to have health care coverage, have an exemption from the coverage requirement, or make an individual shared responsibility payment for any month without coverage or an exemption when you file your federal income tax return.

You do not need to file a return solely to report your coverage or to claim an exemption if you are not otherwise required to file.
If you are not filing a federal income tax return because your gross income is below your return filing threshold, you are automatically exempt from the shared responsibility provision for that year. You do not need to file a tax return to claim an exemption from coverage and you should not make an individual shared responsibility payment. If you are not required to file a tax return for a year but choose to file one anyway, you should claim the coverage exemption on Form 8962, Health Coverage Exemptions, when you file your tax return.

What You Need to Know about Taxable and Non-Taxable Income

All income is taxable unless a law specifically says it isn’t. Here are some basic rules you should know to help you file an accurate tax return:

•Taxable income. Taxable income includes money you earn, like wages and tips. It also includes bartering, an exchange of property or services. The fair market value of property or services received is normally taxable....
Some types of income are not taxable except under certain conditions, including:
•Life insurance. Proceeds paid to you upon the death of an insured person are usually not taxable. However, if you redeem a life insurance policy for cash, any amount you get that is more than the cost of the policy is taxable.
•Qualified scholarship. In most cases, income from a scholarship is not taxable. This includes amounts used for certain costs, such as tuition and required books. On the other hand, amounts you use for room and board are taxable.
•Other income tax refunds. State or local income tax refunds may be taxable. You should receive a Form 1099-G from the agency that paid you. They may have sent the form by mail or electronically. Contact them to find out how to get the form. Report any taxable refund you got even if you did not receive Form 1099-G. Here are some items that are usually not taxable:

•Gifts and inheritances
•Child support payments
•Welfare benefits
•Damage awards for physical injury or sickness
•Cash rebates from a dealer or manufacturer for an item you buy
•Reimbursements for qualified adoption expenses

Obtaining and Claiming a Health Coverage Exemption

The Affordable Care Act requires you and each member of your family to have minimum essential coverage, qualify for an insurance coverage exemption, or make an individual shared responsibility payment for months without coverage or an exemption when you file your federal income tax return.You, your spouse or your dependents may be eligible to claim an exemption from the requirement to have coverage and are not required to make a payment. For any month that you do not qualify for a coverage exemption, you will need to have minimum essential coverage or make a shared responsibility payment.

You can claim most exemptions when you file your tax return. However, you must apply for certain exemptions in advance through the Health Insurance Marketplace,

You may be exempt if:
The minimum amount you must pay for the annual premiums is more than 8.05 percent of your household income

You have a gap in coverage that is less than three consecutive months

You qualify for an exemption for one of several other reasons, including having a hardship that prevents you from obtaining coverage, or belonging to a group explicitly exempt from the requirement

Claiming an exemption when you file
You will claim or report coverage exemptions on Form 8965, Health Coverage Exemptions, and attach it to Form 1040, Form 1040A, or Form 1040EZ. You can file each of these forms electronically.

If your income is below your filing threshold and you are not required to file a tax return, you are eligible for an automatic exemption and you do not have to file a tax return to claim it. You do not need to file a return solely to report your coverage or to claim a coverage exemption.

However, if you choose to file a tax return, you will use Part II, Coverage Exemptions for Your Household Claimed on Your Return, of Form 8965 to claim a health coverage exemption. You should not make an individual shared responsibility payment if you qualify for this exemption because your income is below the filing threshold.

You can claim other IRS-granted coverage exemptions on your tax return using Part III, Coverage Exemptions for Individuals Claimed on Your Return, of Form 8965. For a coverage exemption that you qualify to claim on your tax return, all you need to do is file Form 8965 with your tax return. You do not need to contact the IRS to obtain an exemption in advance.

Reporting Marketplace granted exemptions
If you are granted a coverage exemption from the Marketplace, they will send you a notice with your unique Exemption Certificate Number or ECN. You will enter your ECN in Part I, Marketplace-Granted Coverage Exemptions for Individuals, of Form 8965 in Column C.

If the Marketplace hasn’t processed your exemption application before you file your tax return, complete Part I of Form 8965 and enter “pending” in Column C for each person listed. If you can claim the exemption on your return, you do not need an ECN from the Marketplace.

Pennsylvania has Proclaimed Enrolled Agent Week

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Individuals May Get New Health Care Information Forms This Year

Starting this year, you may receive one or more forms providing information about the health care coverage that you had or were offered during 2015. Much like Form W-2 and Form 1099, which include information about the income you received, these forms provide information about your health care coverage that you may need when you file your individual income tax return.


Two of these forms are new this year and on is a form that was sent to some taxpayers in 2015.
The new forms are:

Form 1095-B, Health Coverage.

Health insurance providers send this form to individuals they cover, with information about who was covered and when.


 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage
Certain employers send this form to certain employees, with information about what coverage the employer offered. Employers that offer health coverage referred to as “self-insured coverage” send this form to individuals they cover, with information about who was covered and when.

The deadline for insurers, other coverage providers, and certain employers to provide Forms 1095-B and 1095-C is March 31, 2016. Some taxpayers may not receive a Form 1095-B or Form 1095-C by the time they are ready to file their 2015 tax return. While the information on these forms may assist in preparing a return, they are not required; it is not necessary to wait for Forms 1095-B or 1095-C in order to file.


The form that was first issued last year is:


 Form 1095-A, Health Insurance Marketplace Statement

The Health Insurance Marketplace sends this form to individuals who enrolled in coverage through the Marketplace. The form includes with information about the coverage, who was covered, and when. The deadline for the Marketplace to provide individuals with Form 1095-A is February 1, 2016. If you are expecting to receive a Form 1095-A, you should wait to file your 2015 income tax return until you receive that form. You are likely to get more than one form if you had coverage from more than one coverage provider, if you worked for more than one employer that offered coverage or if you enrolled for coverage in the Marketplace for a portion of the year and received coverage from another source for part of the year. You are also likely to get more than one form if you changed coverage or employers during the year or if different members of your family received coverage from different coverage providers. You should not attach any of these forms to your tax return but should keep them with your tax records.

Choosing the Correct Filing Status

It’s important to use the right filing status when you file your tax return. The status you choose can affect the amount of tax you owe for the year. It may even determine if you must file a tax return. Keep in mind that your marital status on Dec. 31 is your status for the whole year. Sometimes more than one filing status may apply to you. If that happens, choose the one that allows you to pay the least amount of tax.


Here’s a list of the five filing statuses:

1. Single. This status normally applies if you aren’t married. It applies if you are divorced or legally separated under state law.

2. Married Filing Jointly. If you’re married, you and your spouse can file a joint tax return. If your spouse died in 2015, you can often file a joint return for that year.

3. Married Filing Separately. A married couple can choose to file two separate tax returns. This may benefit you if it results in less tax owed than if you file a joint tax return. You may want to prepare your taxes both ways before you choose. You can also use it if you want to be responsible only for your own tax.

4. Head of Household. In most cases, this status applies if you are not married, but there are some special rules. For example, you must have paid more than half the cost of keeping up a home for yourself and a qualifying person. Don’t choose this status by mistake. Be sure to check all the rules.

5. Qualifying Widow(er) with Dependent Child. This status may apply to you if your spouse died during 2013 or 2014 and you have a dependent child. Other conditions also apply.