Quick Tax Tips for Single Parents

Being a single parent can bring its own unique challenges and concerns in life, but filing taxes shouldn’t be one of them!

Here are some basic things to consider before filing your taxes this year.

Dependents:

Determining who you claim as dependents affects your ability to receive some credits and deductions. In a separation or divorce, this is usually a stipulated agreement between the two parents. However, the both parents can benefit if the parent who normally claims the child agrees to sign a waiver allowing for the non-custodial parent to make the claim. While you cannot split the deduction for a single year, parents can alternate years making the claim or only claim certain children if there are more than one. Remember that a child can only be a dependent if the child has lived with a parent for at least six months out of the year and was financially supported from that parent.

Head of Households:

You can file as head of household if you were not married on December 31, 2014, your kids live with you for at least 50% of the year, and you earn at least 50% of your household income. Head of household status will allow you a lower tax rate and higher deductions.

Exemptions:

For every dependent child you are allowed to deduct $3,950 for 2014. Head of households earning $275,650 or more are phased out.

Tax Credits:

Single parents earning $75,000 adjusted gross income or less can take $1,000 off their tax bill for each dependent 16 and younger in 2014.

Child Care:

Head of households who have an income or are full-time students can claim up to $3,000 per child for qualifying health care. This includes day care, summer day camps, and after school programs. Phaseout starts at $75,000 for single head of household filers.

Earned Tax Income Credit:

The maximum credit is $6,143. If you have three or more children and earn less that $46,997 as a single parent you can take this credit. If you have two children you can still qualify if you have a smaller income.

We hope this will help you begin to file your taxes! For all your tax preparation and tax debt needs call 888-737-0200. The tax experts at Advocate Tax Solutions are here to be your one stop shop for every tax question and problem. Visit www.advocatetaxsolutions.info for more information today!

The New Tax Laws in 2015 That Could Affect You

Every year the U.S. tax code undergoes changes that can affect the amount we owe the IRS. Knowing and planning for these changes can help you save money and confusion this year.

Here are some key changes to be aware of.

401 (k) Contribution Limits

For the past two years, 2013-2013, the contribution limit for 401 (k) retirement account was fixed at $17,500 plus another $5,500 “catch up”. This year the amount has risen to $18,000 with a $6,000 catch up for those 50 years of age and above.401 (k)s, or employer-based retirement plans can be a powerful savings builder. In order to qualify for the catch up contributions you must be of age or turn 50 any time during 2015.

IRA Deduction Eligibility

While IRA contribution limits will remain the same in 2015 ($5,500 plus a $1,000 catch-up for those 50 and older), the deduction for taxpayers making contributions to a traditional IRA is more generous. Here’s what the IRS states, “The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $61,000 and $71,000, up from $60,000 and $70,000 in 2014. For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $98,000 to $118,000, up from $96,000 to $116,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $183,000 and $193,000, up from $181,000 and $191,000. For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.”

Roth IRA Eligibility

The Roth IRA’s eligibility is also expanding. The AGI phase out range has risen from being between $181,000-$191,000 in 2014 to $183,000-$193,000 in 2015 for married and filing jointly couples. For taxpayers filing as single and head of households, the range has risen from $114,000-$129,000 to between $116,000-$131,000.

IRA Rollovers

Beginning this year, taxpayers will only be able to execute one IRA rollover per year. A rollover involves removing money out of one IRA and putting it into another IRA after holding it for less than 60 days.

myRA

The myRA, my Retirement Account, is a new retirement account created by the U.S. Department of the Treasury, designed to be offered through employers. The myRA doesn’t have any fees and offers modest, guaranteed growth, ensuring that you won’t lose any money. A myRA account can be started with as little as $25 and you can add a minimum of $5 at a time. The contributions levels for myRA are the same as for IRAs ($5,5000 with a $1,000 catch-up). Once your account reaches $15,000 it has to be transferred into a private sector Roth IRA.

SEP IRA Contribution Limits

For taxpayers who are self-employed, contribution limits rise to $53,000 in 2015 and compensation limits rise to $265,000. These limits apply to solo 401 (k)s as well.

SIMPLE IRA Contribution Limits

In 2015, you will be able to contribute as much as $12,500 plus a $3,000 catch up if you are 50 and older.

Health Savings Account Eligibility

This year you will no longer be eligible for a Health Savings Account if you forward any FSA money. This new rule has confused many people. You can read more here or contact your tax professionals.

Health Insurance Penalty

The penalty for opting out of healthcare coverage has risen this you. In 2014, the penalty for opting out of the “minimum essential coverage” had a penalty of 1% of their income above the tax filing threshold ($95 per adult, $47.50 per child, and a $285 family maximum. For 2015, the penalty has doubled to 2% of your income ($325 per adult, $162.50 per child, and a family maximum of $975). The penalty will continue to rise in 2016.

While these new tax laws are the ones that will most likely affect you, there are many other new tax laws in 2015 that are worth learning about as well. If you have questions concerning the new laws and how they affect you contact your tax team at 888-737-0200 or visit http://www.advocatetaxsolutions.com

Received an IRS letter? Here are some tips.

Have you received a notice from the IRS? We recognize a letter from the IRS can put an instant knot in your stomach, but before you decide to fight or pay up there are some basic facts you should look at. Here are some tips to help calm your nerves.

You Are Not Alone.

Millions of Americans owe back taxes every year. The IRS is big, faceless, and bureaucratic. They send millions of letters and notices to taxpayers.

Don’t Panic

If you get a letter from the IRS open it before you worry. Not every envelope from the IRS is a bill or bad news. Many IRS letters can be dealt with simply and quickly. Make sure you read carefully. There are many reasons the IRS sends letters and notices. It could simply request payment, notify you of a payment made, tell you of a change in your account, or request additional information for your account.

Keep Copies and Follow Instructions.

Everything the IRS sends provides specific instructions and time periods. Make sure you respond in a timely manner, but for some cases you may not even need to reply. Sometimes letters and notices don’t need a response if you agree with the IRS and sometimes they are just notices saying you will be billed. Read carefully and keep copies. Copies will be helpful to your case wherever proof is needed. Plus, if you have a power of attorney on file, the IRS will send a cope to you as well as your designated attorney. It is a good idea to have an attorney on file if you are ever worried about missing something.

You can ask for more time.

For many notices, the IRS will grant you  an extension of time if requested. If you do ask for an extension, confirm it in writing. Everything you do with the IRS needs to be confirmed in writing.

Get Some Help

Consider getting professional help. A tax lawyer, accountant, or tax consultant may do a better job with the issue than you can. These experts can help you get a better resolution with the IRS and sometimes pay less than you would have to. Here at Advocate Tax Solutions we have tax attorneys, CPAs and tax consultants on staff to help you get the best resolution possible.

For more information call 888-737-0200 or visit http://www.advocatetaxsolutions.com today! All consultations are free and of course confidential.

Even in Space, Astronauts have to File Their Taxes

Not even astronauts are far enough away to escape the IRS. Just like every other American, astronauts have to file their taxes by April 15, even if they’re in space!

How does that happen?

In an interview with CNN, Nasa astronaut Leroy Chiao explained how he managed to file his taxes from space. Chiao, commander of the tenth expedition to the International Space Station, was far from the planet on April 15, 2005. Chiao says that you have to “get someone to help you out on the ground.”

“You do have to anticipate everything,” Chiao said. Since astronauts are in orbit for long periods of time, they either have to plan everything in advance or find someone they trust on the ground.

Lucky for astronauts and Americans alike, Advocate Tax Solutions is on the ground and has trustworthy tax professionals to help with all IRS tax needs.

Regardless of how far you think you may be from the IRS, Advocate Tax Solutions is stationed and ready to help!

 

 

6 Tips for Budgeting Last Minute Holiday Trips

If you’re going home or decided to take a last minute vacation for the holidays, you may be thinking it is too late or that it’s going to kill your budget. After all, doesn’t everyone always say that you have to book a trip far in advance or it will cost you? While it may be easier to find deals when you have more time, there are plenty of ways to save money on last minute planning.

1. Use Expedia or Travelocity to find flights

If you don’t already have frequent flier miles, find a cheaper airline like Spirit Airlines. These sites will also widen your search, and will include alternate airports in the search results. Most major cities have several airports or airports than can be reached within an hour or two hour drive.

2. Sign Up for Fare Alerts

Save time by letting travel sites notify you when fares drop. You can sign up for fare alerts on:

• Airfarewatchdog
• Yapta
• FareCompare
• TripAdvisor
• Kayak

3. Search one seat at a time.

If you are searching for more than one seat, airlines will only show the fares that are available for all travelers, even if some of the seats are available at lower prices. You can save money by splitting up your reservation.

4. Travel on Christmas Day

It’s probably not ideal but it most likely cheaper. If you didn’t book early enough, try looking on Christmas Day. There are fewer people traveling which will result in lower fares.

5. Be Willing to Be Bumped

If you have enough flexibility, be willing to be bumped. It won’t save you money right away but you could get a voucher for your next trip.

6. Look into buses and trains.

There are great alternatives for travel when flying is unaffordable. Taking the bus no longer means taking the Greyhound. Bus services like Megabus offer amazingly low prices and have Wifi and other amenities. Amtrak is also a viable option when flying is not.

With some creative planning, you can get to wherever you want to be during the holidays without paying too much. Have safe travels and a great holiday!

If you have any financial questions call your trusted advisers at 888-737-0200

or visit www.advocatetaxsolutions.com

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As Fuel Prices Lower, There Could be a New Gas Tax

Will there be a new Gas Tax?

When filling up your gas tank you may have noticed that gas prices are lower than they have been in years! While you may be enjoying the extra money in your pocket, former Pennsylvania Gov. Ed Rendell says you shouldn’t get used to it.

On average, gas prices are about 50 cents less a gallon than a year ago. Various politicians, including Rendell, have suggested that due to the low gas prices it is the optimal time to increase gas taxes.

He supports raising the federal gas tax in order to bring in funds for roads, bridges and construction across the U.S.  In an interview with CNBC the Pennsylvania Democrat argued, “Our infrastructure’s crumbling. Our roads and our bridges are in dangerous condition.” Rendell believes that if the roads were in better condition, it would allow for more efficient traffic, and that raising the tax would save actually save people money.

Raising taxes is never popular, but if the gas taxes were raised now, it wouldn’t seem like much of a tax hike. The average American wouldn’t be paying more out of pocket than they were in the recent past.

Gas taxes, by historic levels, are incredibly low right now. The Washington Post pointed out that the federal gas tax has been at a flat 18.4¢ since 1993. At that time the price of a gallon was on average around $1.

At least the move won’t be quite as unpopular as it would have been if it had been introduced when Americans were paying on average $3.50 or $3.75 per gallon.

Have tax questions? Call the tax experts at 888-737-0200 for help!

Or sign up for a free consultation at www.advocatetaxsolutions.com

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Happy Cyber Monday! It Could Be the Last Tax Free Season for Online Sales

Happy Cyber Monday!

As the online holiday shopping frenzy begins today, we thought we’d share some advice for our e-commerce friends: ENJOY THE TAX FREE ONLINE MARKETPLACE WHILE YOU STILL CAN! While the National Sales Tax probably won’t happen this season, we bet you can expect to give away a good chunk of tax money to the government in the future.

The National Retail Federation expects that Cyber Week will see over $9 billion in total sales this year. While that’s a lot of online sales, e-commerce merchants are not celebrating. That’s because the government took notice of this industry’s huge success and Washington wants in. Currently the Marketplace Fairness Act has been passed by the Senate and residing in the House. This bill would allow states to collect taxes from residents who buy online purchases from out-of-state merchants. The buyers would be taxed at the point of purchase, and the retailers would remit the taxes to the eligible states and local municipalities.

As sales skyrocket this week, we expect the National Internet Sales Tax debate to heat up. Key lawmakers and major online retailers, such as the National Governors Association, Footlocker, and Amazon are eager to use the next few weeks of this Congress to push the long stalled bill.

Amazon, the country’s largest online retailer, is already collecting online sales tax and has made a deal with Massachusetts to collect sales taxes. This agreement only applies in the state and solely for purchase made on Amazon.

Because of companies like Amazon, we, at Advocate Tax Solutions, believe that The Marketplace Fairness Act will pass this next season, even if not in the exact form it is currently. The bill will be advertised as a way to even out the playing field for all online merchants.

Whether you are an online retailer or an avid online shopper, the impact of this bill could be huge. So get your Cyber Monday on and take advantage of this holiday’s tax free online market! We know we will.

 

Along with cyber week, tax season is coming up. Don’t forget to get your taxes in order. Call Advocate Tax Solutions at 888-737-0200 for any tax concerns and for tax preparation. Enjoy the holidays and get the tax relief you need!

Visit http://www.advocatetaxsolutions.com to learn more.

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Bad News Saleen Fans: Automotive Company Out of Money and Owes Millions

       Saleen Automotive recently unveiled a modified Tesla Model S and announced plans to tune the 2015 For Mustang, but information contained in the company’s latest quarterly report has some wondering if Saleen will soon fall to the same fate as Hummer and Saab.

 

Jalopnik reported that as of September 30, “Saleen owed $583,900 in unpaid payroll taxes; $1,148,574 of accounts payable was greater than 90 days past due; $352,795 of outstanding notes payable were in default; and $398,176 is owed to a bank as of November 2014, which the Company has not paid and expects to be in default unless the bank agrees to another extension.”

Saleen’s cash assets were listed at $7,261 at the end of the quarter; definitely not enough to run a car company. The situation is so bad that Saleen is counting on another bank extension so the company can continue operating and hopefully turn things around.
This news casts doubt for Saleen enthusiasts and buyers. Saleen’s recently modified Tesla Model S, the Saleen FourSixteen, and the new Saleen 302 Black Label, that just started coming to the market, could be quickly put on hold.
It’s a sad day when ingenious companies come to a struggle due to financial issues and tax debts. We hope Saleen has the turnaround it hopes for and gets the representation it needs. Saleen if you need new accountants, we’re here for you!

 

Do you owe over $10, 000 in back taxes? Call us today@: (888)737-0200 

or visit www.AdvocateTaxSolutions.com to learn more about back tax resolutions and IRS debt help.

 

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Tax Solutions for the Family Caregiver

This year you could claim your loved one as a dependent. Advocate Tax Solutions gets you the help you deserve with tax preparation services and back tax relief.

Being a family caregiver isn’t just time-consuming, it can be expensive. Most caregivers donate to provide quality care for the ones they love.

This tax season, you may be able to claim your adult family member or friend as a dependent on your income taxes. This would allow you to get a tax exemption on his or her medical costs including prescription drugs, doctor and hospital visits, dental and eye care, transportation to get to medical appointments, health insurance programs, and nursing care.
To claim your loved one as a dependent:
• You, the caregiver, cannot be claimed as a dependent by another taxpayer.

• Residency: They must be a resident of the U.S., Canada or Mexico.

• Relationship: They must be a spouse, dependent child or step-child, a parent or stepparent, father-in-law, mother-in-law, OR they must have lived with you all year.

• Elder’s income: Your loved one’s gross income for the year must be less than $3,900 and they cannot file a joint tax return with their spouse. (Social Security is usually excludable)

• Amount of support you provide: You must provide more than 50% of you loved ones financial support. This can include food, housing, medical transportation. If they live with you, you can include a reasonable percentage of your mortgage and utilities. Those who are in assisted living or remain in their own homes can qualify if the correct support levels are still met.

• Records: In order to claim a loved one as a dependent you must keep proof of payments and receipts.

 
Don’t worry about figuring out what deductions you are eligible for, Advocate Tax Solutions can give you the expert tax preparation services you need to receive the tax deductions and credits you’re eligible for.

Do you care for a loved one and have tax preparation questions? Call us today@: (888)737-0200 

or visit www.AdvocateTaxSolutions.com to learn more about back tax resolutions and tax preparations. 

 

 

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SIMPLE BACK TAX LESSONS FROM AL SHARPTON

Advocate Tax Solutions gives their views on the recent back tax problems of the rich and famous

 

“If we owed $4.5 million in ’08 then how could we owe this now, unless you’re saying that everybody just went to sleep on this and just gave us a pass, which is ridiculous,” Sharpton said in the CNN article.

This week Civil Rights Leader Al Sharpton blasted the extensive New York Times Report saying he owed $4.5 million in back taxes. Sharpton argued that it wasn’t  possible for him to owe that much. “The MSNBC host said in a press conference Wednesday that the $4.5 million was the original figure he was ordered to pay back in 2008, but that he has been making regular payments since then and the amount is now less,” reports CNN.

“If we owed $4.5 million in ’08 then how could we owe this now, unless you’re saying that everybody just went to sleep on this and just gave us a pass, which is ridiculous,” Sharpton said in the CNN article.

The Times articles describes poor planning, with Mr. Sharpton’s entities paying for and owning everything. This could include his personal items. If Sharpton is trying to merge personal and business expenses he is not adhering to the fundamental tax law that separates them.  While you can write off many things with a dual motive, your tax life will be easier if you avoid them and keep records.

The IRS keeps good records and so should you. Keeping records will help you in a tax dispute and can help you keep out of tax trouble.  The IRS audits may reject your tax deductions unless you have records to validate them.

Despite the great amount Mr. Sharpton owes in tax liens, he is not alone in his problems and went through the same process as everyone with back tax problems.  The process starts with notices. The IRS can only file a Notice of Federal Tax Lien after the IRS assesses the liability and sends a Notice and Demand for Payment, which states how much you owe. The IRS automatically has a tax lien if you don’t send the full payment within 10 days.

An IRS tax lien covers all of your property before and after the lien filing. IRS tax liens last 10 years, but it is better to remove them immediately. This involves paying the tax, interests, and penalties; or posting a bond guaranteeing payment.

Mr. Sharpton says he has been compliant to this process and is doing his best to pay his back taxes.  The IRS still has not revealed how much Mr. Sharpton owes and Sharpton believes his name is being dragged through IRS-ruin because of politics. He told Business Insider the negative story by the New York Times comes just as a grand jury is about to release its findings in the shooting of Michael Brown by a white Ferguson, Mo., police officer.

“Every time there’s a Sean Bell or a Ferguson or a Trayvon Martin, we go through my taxes. It’s the same agreement y’all. It’s the same thing we announced in ’09. It is the same thing we’ve been paying every month,” he said.

That could be possible, but either way it is evident that the best way to get out of IRS debt is to keep records and be compliant and active with your payment agreement.  Millions of American’s owe back taxes, and we hope Rev. Sharpton found the representation he needed to resolve his back tax debt.  However, if we were his accountants he probably wouldn’t have had this problem in the first place!  Tax per return is usually the result of either not making estimated tax payments or improperly filing your return.  Al Sharpton, we are available if you are seeking new representation!

Do you owe over $10, 000 in back taxes? Call us today@: (888)737-0200 

or visit www.AdvocateTaxSolutions.com to learn more about back tax resolutions and IRS debt help.

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