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Medical Expense Deduction: Medical expenses must now be 10% of Adjusted Gross Income to qualify as a deduction on Schedule A. Taxpayers 65 years of age or older remain at 7.5% until the 2017 tax year.

New Home Office Procedure: If you maintain a space in your home that is used regularly and exclusively as an office for your job or business, it is now easier than ever to claim a deduction for the use of that space. For up to 300 square feet, you may simply multiply the square footage by $5 to come up with the deductible number. For many taxpayers, this will make the process easier, as they will not be required to document actual costs. There is some downside as well, so we will help you consider the best option for your individual situation.

Don't Rush to File: There are a number of factors which may delay the filing of your return.

  • The  healthcare regulations require taxpayers to provide proof of insurance on their income tax return. For more information on how this will work for the current tax year, click here.
  • If you have investments for which you receive a 1099, be careful not to rush to file your returns. Current regulations allow investment companies to issue Form 1099 as late as mid February. However, many taxpayers will receive amended 1099 statements after that date.
  • Taxpayers who receive K-1 reports from partnerships should also wait until they receive their K-1. The deadline for corporations to mail K-1 statements is March 16. If you file your returns before these documents are received, you will be required to file an amended return later, so it is better to be patient and get it right the first time.
  • Many taxpayers are not aware of the fact that their investment portfolio may include holdings in partnerships that are required to issue a K-1. If you have investments, check with your broker or financial adviser to ascertain whether or not you should expect a K-1
 
Filing Extensions: Taxpayers may choose to file for an extension allowing them to have until October 15 to file their tax returns. This may be a good idea if you have incomplete documentation that requires more time to gather, if you have life circumstances that make it difficult to file, if your tax situation is complicated in some way that requires the preparer to do more research in order to get it right, or if there are other unusual circumstances. Be aware that any anticipated amounts due must be paid with the extension request.

Get Your Refund Faster: The best way to speed your refund is to file electronically (RWH Tax Preparation files all returns electronically at no extra charge unless an unusual circumstance prohibits electronic filing,) and to authorize direct deposit into a checking or savings account. Some tax return preparers offer bank products that allow their fees to be deducted from the anticipated refund and for the taxpayer to receive their refund immediately in the form of a debit card. RWH Tax Preparation does not offer this service, as the fees associated with this service for the taxpayer are excessively high. Using electronic filing and direct deposit, refunds take only a few days in most cases.

Amended Returns: You may amend tax returns for the previous three years. If you feel a mistake has been made in your returns for 2013, 2014, or 2015 bring them in, and we will review them for you. After April 15, 2017, you will not be able to amend your 2013 returns, so do not delay.

Charitable Contributions: All charitable contributions require proof documents. Proof documents may be official receipts from the organization receiving the contributions or cancelled checks showing the contribution amounts. The IRS no longer allows undocumented contributions such as cash placed into a church offering plate. If you do contribute cash offerings to your church, use their regular giving envelopes and insist on a statement of receipt. RWH Tax Preparation will not claim any charitable contribution for which there is no supporting document.

IRA Contributions: You may be able to decrease your tax liability by contributing to an IRA account. If you qualify, you have until April 15, 2017 to make contributions to an IRA for the 2016 tax year. If you are not sure if you qualify, contact us for individual guidance.

PA Returns Required: Pennsylvania requires a tax return from any individual living or working in the Commonwealth who has income greater than $33. This includes many people, such as retirees and children, who may not be required to file a Federal return. Pennsylvania includes wages, interest, dividends, and some retirement income to determine whether or not you have reached the $33 limit.

Use Tax: Pennsylvania, and many other states now require reporting purchases made out of state and online. You should keep accurate records and receipts for all such purchases. If you are unable to document those purchases, the state will impose Use Tax based on a table that uses your income to determine the tax due. Failure to report those purchases and pay the tax due is considered tax fraud.

 RWH Tax Preparation---2585 Privada Dr---The Villages, FL 32162---(484) 437-4395