As expected, Congress has extended nearly all of the tax law changes that were scheduled to expire on December 31st. These include the Child Tax Credit of up to $1,000; the deduction of up to $4,000 in college tuition for certain taxpayers and the deduction of mortgage insurance premiums for a qualified residence. The Energy Savings Tax Credit has also been extended but if you used the $500 maximum in prior years you are not eligible to claim it this year.
HEALTH INSURANCE: Regarding health insurance reporting requirements, if you received your health insurance through the Marketplace you will be receiving a Form 1095-A. Those getting coverage through an employer-sponsored plan, private insurance, Medicare or Medicaid should receive Form 1095-B or 1095-C. Please include these documents with your tax information. For 2015, insurers who are required to file Forms 1095-B and 1095-C have been given an extension of time to file. If you do not receive your form, please let us know what months you, and everyone listed on your tax return, had the minimal essential health insurance coverage.
Under the Affordable Care Act, the penalty for not having health insurance has increased to the higher of $325 per adult and $162.50 per child (up to $975 for a family), or it’s 2% of your household income above the tax return filing threshold for your filing status – whichever is greater.
ELECTRONIC FILING. Because I prepare more than 10 tax returns each year, the IRS requires that I electronically file all returns that I prepare. As the taxpayer, you may choose to opt-out of this filing method but I must prepare Form 8948 and attach it to the paper return before you mail it. Since most of you are familiar with the e-file procedure, I want to remind you to review your return and verify your banking information with us before signing the signature pages.
MILEAGE RATES. In 2015 mileage rates were 57 ½ cents/mile for QUALIFIED work-related travel, 23 cents/mile for moving and medical travel and 14 cents/mile for charitable activities. With gas prices dropping, these rates are expected to decline in 2016.
E-MAIL. Please provide us with your email address. This has become an invaluable method of communicating with clients. You will find all of our office email addresses at the top of this letter.
PAYMENTS. We now accept all major credit cards as payment for our services. Payment must be received before we provide you with your return. This can be done over the phone if you want your return mailed to you.
PREPARATION LIST. On the back of this letter you will find a list of items needed to prepare your return. I am happy to include the preparation of your local wage tax return as part of my service.
However, due to the number of local municipalities, each with their own rules, the accuracy of these returns cannot be guaranteed unless you provide me with original forms and instructions.
Thank you for your continued support. I appreciate your loyalty and trust in our services.
P.S. We have recently released our new website at http://tompaolo.com. This will enable me to deliver relevant tax law changes in a timelier manner. To view them, go to the website and log in with the password: tompaolo. There you can sign up to receive our postings whenever we put up new information (e.g. tax law changes, our annual letter, my bad jokes, etc.) or you can simply log in each time you want to see what’s there. THIS IS NO JOKE (but I can’t wait to post a few to the site)!!