Top Ten Tax Facts if You Sell Your Home

Posted on April 18, 2019 by FCA Admin

Issue Number:    IRS Summertime Tax Tip 2014-08

Inside This Issue

Do you know that if you sell your home and make a profit, the gain may not be taxable? That’s just one key tax rule that you should know. Here are ten facts to keep in mind if you sell your home this year.

1. If you have a capital gain on the sale of your home, you may be able to exclude your gain from tax. This rule may apply if you owned and used it as your main home for at least two out of the five years before the date of sale.

2. There are exceptions to the ownership and use rules. Some exceptions apply to persons with a disability. Some apply to certain members of the military and certain government and Peace Corps workers. For details see Publication 523, Selling Your Home.

3. The most gain you can exclude is $250,000. This limit is $500,000 for joint returns. The Net Investment Income Tax will not apply to the excluded gain.

4. If the gain is not taxable, you may not need to report the sale to the IRS on your tax return.

5. You must report the sale on your tax return if you can’t exclude all or part of the gain. And you must report the sale if you choose not to claim the exclusion. That’s also true if you get Form 1099-S, Proceeds From Real Estate Transactions. If you report the sale you should review the Questions and Answers on the Net Investment Income Tax on IRS.gov.

6. Generally, you can exclude the gain from the sale of your main home only once every two years.

7. If you own more than one home, you may only exclude the gain on the sale of your main home. Your main home usually is the home that you live in most of the time.

8. If you claimed the first-time homebuyer credit when you bought the home, special rules apply to the sale. For more on those rules see Publication 523.

9. If you sell your main home at a loss, you can’t deduct it.

10. After you sell your home and move, be sure to give your new address to the IRS. You can send the IRS a completed Form 8822, Change of Address, to do this.

Important note about the Premium Tax Credit. If you receive advance payment of the Premium Tax Credit in 2014 it is important that you report changes in circumstances, such as changes in your income or family size, to your Health Insurance Marketplace. You should also notify the Marketplace when you move out of the area covered by your current Marketplace plan. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.

If you still need to do your 2013 taxes, use IRS e-file to prepare and file your tax return. The tax software will do most of the hard work for you. You can use IRS e-file through Oct. 15. If you file a paper return, you may use the worksheets in Publication 523 to help you file.

For more on the sale of a home see Publication 523 on IRS.gov. You can call 800-TAX-FORM (800-829-3676) to get it by mail.

Additional IRS Resources:

  • Publication 5152: Report changes to the Marketplace as they happen  English | Spanish

IRS YouTube Videos:

IRS Podcasts:

 

 

Note. From Issue Number: IRS Tax Tip 2014-08.  Copyright 2014 by Copyright Holder. Reprinted with permission.

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New IRS Tumblr Site Helps with Tax Season

Posted on February 21, 2019 by FCA Admin

Issue Number:    Special Edition Tax Tip 2013-04

Inside This Issue

Tax issues can touch a wide range of people who need information in many different ways. For that reason, the IRS has added Tumblr to its list of social media platforms it is using to share IRS news and information. The new Tumblr platform at www.internalrevenueservice.tumblr.com provides another way for taxpayers to get current tax information when and where they want it.   Tumblr is a micro-blogging site where users can access and share text, photos, videos and other information from their browser, smartphone, tablet or desktop.

The new site shares information about important programs to help taxpayers, such as tax law changes, the Earned Income Tax Credit and Free File. The Tumblr site also makes it easier for IRS partners and others to share tax information they receive from the IRS.

In addition to Tumblr, check out these other IRS Social Media sites:

  • YouTube – The IRS YouTube channels offer short, informative videos in English, American Sign Language and Spanish. IRS currently has more than 100 videos with more than 3.1 million views. For more information, watch the YouTube video “IRS Social Media.”
  • Twitter – More than 61,000 people follow the IRS twitter feeds. The latest tax information is available at @IRSnews or @IRSenEspanol. @IRStaxpros covers news for tax professionals; @RecruitmentIRS provides updates for job seekers. The Taxpayer Advocate Service has information available @YourVoiceAtIRS.

Remember, to protect taxpayer privacy, the IRS only uses social media tools to share public information. IRS does not answer personal tax or account questions. You should never post confidential information, like a Social Security number, on social media sites.

For more information on IRS’s use of social media, go to IRS.gov/socialmedia.

Note. From Issue Number: IRS Tax Tip 2013-04.  Copyright 2014 by Copyright Holder. Reprinted with permission.

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Automated IRS System Helps College-Bound Students with Financial Aid Application Process

Posted on November 22, 2018 by FCA Admin

Issue Number:    Special Edition Tax Tip 2012-12

Inside This Issue

College-bound students and their parents sometimes face last minute requests to complete or provide additional information for financial aid applications.

The Internal Revenue wants to help by minimizing time spent on the completion of the Department of Education’s Free Application for Federal Student Aid (FAFSA). By using the IRS Data Retrieval Tool, applicants can automatically transfer required tax data from their federal tax returns directly to their FAFSA form.

This IRS tool is a free, easy and secure way to access and transfer tax return information onto the FAFSA form. Using the tool saves time, improves accuracy and may reduce the likelihood of the school’s financial aid office requesting that you verify the information.

Here are some tips on using the IRS DRT:

  • Eligibility Criteria  To use the IRS DRT  to complete their  2012 -2013 FAFSA form, taxpayers must:

o          have filed a federal 2011 tax return,
o          possess a valid Social Security Number,
o          have a Federal Student Aid PIN (individuals who don’t have a PIN will be given the option to apply for one through the FAFSA application process), and
o          have not changed marital status since Dec. 31, 2011.

  • Exceptions  If any of the following conditions apply to the student or parents, the IRS Data Retrieval Tool cannot be used for the 2012 FAFSA application:

o          an amended tax return was filed for 2011,
o          no federal tax return was filed for 2011,
o          the federal tax filing status on the 2011 return is married filing separately or
o          a Puerto Rican or other foreign tax return has been filed.

Applicants who cannot use the IRS DRT to meet college requests for verification, may need to obtain an official transcript from the IRS. Transcripts are not available until the IRS has processed the related tax return. To order tax return or tax account transcripts, visit IRS.gov and select “Order a Transcript” or call the toll-free Transcript line at 1-800-908-9946.

In addition, the IRS offers money-saving information for college students and their parents about tax credits and deductions for qualifying tuition, materials and fees.

Links:

Note. From Issue Number: Special Edition Tax Tip 2012-12 . Copyright 2012 by Copyright Holder. Reprinted with permission.

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Tax Help ‘en Español’

Posted on September 21, 2018 by FCA Admin

Issue Number:    IRS Tax Tip 2013-14

Inside This Issue

Tax information can be tough to understand in any language. It may be more difficult to understand if it is not in your first language. The IRS offers a wide range of free and easy-to-use products and services for Spanish-speaking taxpayers. Here are some tips if you need federal tax assistance from the IRS in Spanish.

  • Get answers 24 hours a day seven days a week. IRS.gov/espanol has a wealth of information accessible every day for individuals and businesses. You will find links to tax-related information and warnings about common tax scams that can victimize taxpayers. You can also check the status of your tax refund through the improved online tool “¿Dónde está mi reembolso?” Using the Asistente EITC, you can find out if you qualify for the Earned Income Tax Credit, a refundable tax credit for many people who earned less than $50,270.
  • Use Free File to prepare and e-file your taxes for free. IRS Free File offers free tax preparation and e-file options for all taxpayers. The Free File program is a partnership between the IRS and the Free File Alliance. The Alliance is a group of private-sector software companies. If your 2012 income was $57,000 or less, you qualify to use free tax software. If your income was higher, or you are comfortable preparing your own tax return, there’s Free File Fillable Forms, the electronic versions of IRS paper forms. Visit IRS.gov/freefile and select ‘En Español’ to review your options.
  • Try IRS e-file to file your return. IRS e-file is the safe, easy and most common way to file a tax return. The IRS has processed more than 1 billion returns safely and securely. If you owe taxes, you have payment options to file early and pay by the April 15 tax deadline. Visit IRS.gov/espanol and select Opciones Electrónicas to review your options.
  • Get up-to-date at the Multimedia Center. Watch YouTube video tax tips and listen to podcasts on various IRS topics in Spanish and English. Enter the keywords “Centro Multimediático” into the search box of the IRS.gov website.
  • TeleTax gives you tax and refund information. TeleTax is a toll-free, automated telephone service. It provides helpful pre-recorded tax topic messages and refund information. You can find a list of more than 125 TeleTax topics available in Spanish and English in the instructions for Form 1040, 1040A or 1040EZ. When you call to check your refund status, have a copy of your tax return handy. This will help you respond to the system prompts. TeleTax is available 24 hours a day, seven days a week at 800-829-4477.
  • Get tax forms and publications. You can view and download several tax forms and publications in Spanish directly from IRS.gov/espanol at any hour of the day or night.
  • Visit the IRS Spanish Newsroom. Find the agency’s most recent announcements, tips and information on new tax laws that could affect you. Avoid missing any benefits and keep up to date by typing the keywords “Noticias en Espanol” into the search box of the IRS.gov website.
  • Call the IRS for free tax help in Spanish. The IRS’ toll-free telephone number offers service from Spanish-speaking IRS representatives. Call the IRS customer service line at 800-829-1040 and then press the number 8.
  • Stay connected through Twitter en Español. Get all the newest information and helpful tax tips in Spanish by following the IRS on Twitter @IRSenEspanol.
  • Get Multilingual Assistance at IRS Taxpayer Assistance Centers. Visitors can get help at IRS Taxpayer Assistance Centers in more than 150 languages, including Spanish, either in person or through an Over-the-Phone Interpreter. Before you visit, it’s always a good idea to check TAC locations, hours and available services by visiting IRS.gov and clicking on ‘Help & Resources’ and then on ‘Contact Your Local IRS Office.’

Additional IRS Resources:

  • Note. From Issue Number: IRS Tax Tip 2013-14.  Copyright 2014 by Copyright Holder. Reprinted with permission.
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Get Ready…Get Set…SaveUp.com!

Posted on August 11, 2018 by FCA Admin

Are you ready for a new financial revolution?  If so, then SaveUp is for you. Save up is a new rewards program. Best of all, the goal of SaveUp is to encourage financial literacy and financial independence. So how does SaveUp accomplish this?  SaveUp rewards good financial behaviors by giving people the opportunity to win prizes.

In order to play, users must register their accounts with SaveUp. Credits are earned for good financial habits such as depositing money into a savings account or paying down debt. These credits then turn into valuable prizes. Examples of accounts that can be registered with SaveUp include savings, IRAs, mortgages, and even credit cards. Best of all, SaveUp is completely free and completely secure. 

So get ready…get set… and SaveUp in 2012! Users can register for SaveUp at SaveUp.com.

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A Summer Adjustment Can Prevent a Tax-Time Surprise

Posted on July 18, 2017 by FCA Admin

Issue Number:    IRS Summertime Tax Tip 2014-10

Inside This Issue

 

When it comes to filing a federal tax return, many people discover that they either get a larger refund or owe more tax than they expected. But this type of tax surprise doesn’t have to happen to you. One way to prevent it is to change the amount of tax withheld from your wages. You can also change the amount of estimated tax you pay. Here are some tips to help you bring the amount of tax that you pay in during the year closer to what you’ll actually owe:

  • New Job.   When you start a new job, you must fill out a Form W-4, Employee’s Withholding Allowance Certificate. Your employer will use the form to figure the amount of federal income tax to withhold from your pay. Use the IRS Withholding Calculator on IRS.gov to help you fill out the form. This tool is easy to use and it’s available 24/7. •    Estimated Tax.  If you get income that’s not subject to withholding you may need to pay estimated tax. This may include income such as self-employment, interest, dividends or rent. If you expect to owe a thousand dollars or more in tax, and meet other conditions, you may need to pay this tax. You normally pay it four times a year. Use the worksheet in Form 1040-ES, Estimated Tax for Individuals, to figure the tax. •    Life Events.  Make sure you change your Form W-4 or change the amount of estimated tax you pay when certain life events take place. A change in your marital status, the birth of a child or buying a new home can change the amount of taxes you owe. You can usually submit a new Form W–4 anytime. •    Changes in Circumstances.  If you receive advance payment of the premium tax credit in 2014 it is important that you report changes in circumstances, such as changes in your income or family size, to your Health Insurance Marketplace. You should also notify the Marketplace when you move out of the area covered by your current Marketplace plan. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.

For more see Publication 505, Tax Withholding and Estimated Tax. You can get it on IRS.gov, or call 800-TAX-FORM (800-829-3676) to get it by mail.

Additional IRS Resources:

  • Publication 5152: Report changes to the Marketplace as they happen  English | Spanish

IRS YouTube Videos:  

 

IRS Podcasts:

 

 

 

Note. From Issue Number: IRS Tax Tip 2014-10.  Copyright 2014 by Copyright Holder. Reprinted with permission.

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The Return of Layaway

Posted on May 13, 2017 by FCA Admin

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Do you remember when your mom would put that big purchase on layaway?  It seems like it was so long ago.  Not anymore.  In these tough economic times, many retailers are offering layaway as an option for many of their customers.  This makes it more flexible and will give customers the option of not paying with their credit cards. Some of the top retailers offering layaway plans include Kmart, Toys R Us, and even Marshalls.

Although layaway benefits consumers, it can be costly to some retailers.  Several retailers have chosen to not offer layaway. It costs too much money if the customers fail to make the payments. But don’t get discouraged. A website called e-layaway.com, www.elayaway.com makes it simple to participate in a layaway program through the internet.  This site also provides money savings tips.  Signing up is easy and you can start participating instantly.   E-layaway gets my vote for ease of use and affordability for customers.

Have you used E-layaway?  Tell us what you think of the site?

Follow us on Twitter.: http://twitter.com/1stCapAdvise

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Personal calls on business cell phones. Is it time to pay up?

Posted on January 16, 2017 by FCA Admin

The IRS is looking to revamp a 2o year old law regarding employee use of company cell phones.  The law requires employers to track the amount of time employees spend on personal calls.  This is considered benefit income and can be taxed.  This law was not very popular because of the tedious task of tracking employee personal phone calls.   But now the IRS is receiving increasing inquires on reviving this law.  From now until September 4th, the IRS is accepting comments regarding the proposed changes.  The IRS has come up with three possible methods of how this law will work.

The methods are:

  • Minimal Personal Use Method: This method requires that employers limit calls to minimal use and track the minimal use by employees.
  • Safe Harbor Substantiation Method: This method requires an employer to use a percentage to determine the portion of time considered business use and non business use.
  • Statistical Sampling Method: Employers would use a statistical sampling method to determine the amount of time considered business and non business use.

 

For more information, visit the IRS website at

http://www.irs.gov/govt/fslg/article/0,,id=209572,00.html.

 What are your views on these proposed changes?

 

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Four Tax Tips about Your Unemployment Benefits

Posted on November 21, 2016 by FCA Admin

Issue Number:    IRS Tax Tip 2013-26

Inside This Issue

If you received unemployment benefits this year, you must report the payments on your federal income tax return.

Here are four tips from the IRS about unemployment benefits.

1. You must include all unemployment compensation you received in your total income for the year. You should receive a Form 1099-G, Certain Government Payments. It will show the amount you were paid and the amount of any federal income taxes withheld from your payments.

2. Types of unemployment benefits include:

  • Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund
  • Railroad unemployment compensation benefits
  • Disability payments from a government program paid as a substitute for unemployment compensation
  • Trade readjustment allowances under the Trade Act of 1974
  • Unemployment assistance under the Disaster Relief and Emergency Assistance Act

3. You must include benefits from regular union dues paid to you as an unemployed member of a union in your income. However, other rules apply if you contribute to a special union fund and your contributions are not deductible. If this applies to you, only include in income the amount you received from the fund that is more than your contributions.

4. You can choose to have federal income tax withheld from your unemployment benefits. You make this choice using Form W-4V, Voluntary Withholding Request. If you complete the form and give it to the paying office, they will withhold tax at 10 percent of your payments. If you choose not to have tax withheld, you may have to make estimated tax payments throughout the year.

For more information on unemployment benefits see IRS Publications 17, Your Federal Income Tax, or IRS Publication 525, Taxable and Nontaxable Income. You can download these free booklets and Form W-4V from the IRS.gov website. You may also order them by calling 800-TAX-FORM (800-829-3676).

Additional IRS Resources:

 

Note. From Issue Number: IRS Tax Tip 2013-26.  Copyright 2014 by Copyright Holder. Reprinted with permission.

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Additional Protection for US Consumers

Posted on October 1, 2016 by FCA Admin

President Obama wants to create the Consumer Financial Protection Agency.  The purpose of the agency is to protect consumer credit and their banking transactions.  Additionally, The Federal Reserve Bank will have the added responsibility of supervising large financial institutions and monitor risk within the financial system.  Obama even wants to give the Consumer Protection Agency some of the current responsibilities of the Federal Reserve Bank and the Treasury Department.  Obama’s goal is to prevent big bank failures such as Lehman Brothers. He further wants to protect consumers from credit risks from   bad lending practices due to mortgages and credit cards.   It is hoped that the new agency will fine companies who have abusive practices and will help prevent another recession.

Do you think the Consumer Financial Protection Agency will serve its intended purpose?

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