Category Archives: Tax Filing

Tax Issues When Married to a Foreign Spouse?

Are you married to a foreign spouse? A non-resident of the USA?

A foreign spouse or as the IRS puts it, a nonresident alien, what is that, you may wonder?  In this day and age, with businesses going global and worldwide travel being so easy, it is more and more common to see marriages take place between a U.S. citizen/non-U.S. citizen who is a resident of another country. These marriages trigger significant tax consequences. Continue reading

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Last Minute Tax Tips, Last Minute Tax Payments

Last Minute Tax Tips and Last Minute Tax Payments

Are you are up against the April 18, 2017 deadline and still need some information to complete your tax return, here are some last minute tax tips. Keep in mind these tips will help you also address last minute tax payments. Continue reading

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Tax Filing Due Date 2017 is Fast Approaching

Tax Filing Due Date is Right Around the Corner

The due date to file taxes is April 18th for Federal and Massachusetts tax filing. In fact, most states are posting April 18th as the tax filing due date. Just a reminder if you still have to file your 2016 tax return, April 18, 2017 is the due date. This tax filing deadline is so you can file your return or pay any taxes you owe. For those who are not done with your tax preparation, we suggest you file for the automatic six-month extension. Also, you can pay the tax you estimate to be due. The due date is normally April 15, but the 15th falls on a weekend and the next business day, April 17, is Emancipation Day, a legal holiday in Washington D.C., so the due date in 2017 is April 18. Continue reading

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Checking Refunds Are Fast, Easy When Using Direct Deposit

Checking refunds are Fast and Easy. Direct Deposit is even Faster

Checking refunds are fast and easy when you use direct deposit. Did you file your 2016 federal return? Are you due a refund? You can check the status of your refund online. Continue reading

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Do I Have to File a Tax Return?

When must I file a tax return by?

Do I have to file a tax return? This is a question many taxpayers ask during this time of year – tax time. The question is far more obsure than people believe. To fully understand, we need to consider that there are times when individuals are REQUIRED to file a tax return, and then there are times when it is to individuals’ BENEFIT to file a return (even if they are not “required” to file). Continue reading

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Employment Lawsuit Won?

So you won an employment lawsuit. What does that mean for your tax return come April? How do the tax laws relate to the tax on money settlements and damage awards? Employment legal actions are complex and can sometimes seem unfair. The following factors help to determine the actual taxation of the award: Continue reading

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No Tax Return Filed? Oh Oh!

You did not file your tax return you say? No tax return filed in years? You are not alone. There are millions of individuals who do not file a tax return each year. Many of them don’t simply because their income is below the filing threshold levels for the year based upon their filing status.

Still others simply procrastinate. They risk giving up their refunds and credits. These credits include earned income tax credits, child tax credits, tuition credits and excess withholding. Mind you, these credits and refunds belong to them. Continue reading

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2015 Tax Changes for Massachusetts

Here are four 2015 tax changes. Have your filed your income tax return yet in Massachusetts?

2016_04_13 2015 Tax Changes graphicIf not, you may want to get your tax information together today before your run the risk of being late. If you can’t get your information together, at the very least, consider filing an extension. The Massachusetts tax filing extension allows for an automatic six months. Note this is also the case for the IRS. Before you do that, take a few minutes to read about these income tax changes that took place on or before January 1, 2015 for the State of Massachusetts:

Filing Due Date for 2015 Income Tax Returns

If you are not aware, you should be that the filing of tax returns that include Forms 1, 1NR/PY and extensions are due on or before April 19, 2016. Please make a note of it. That is one week away!

Tax Rates

Personal income tax rates are applied against different classes of Massachusetts taxable income. The tax rate on most classes of income is scheduled to decrease in years where the state achieves revenue growth benchmarks set forth by the formula in M.G.L. Chapter 62, Section 4(b).

As of January 1, 2015, the 5.2% tax rate on most taxable income has been reduced to 5.15%. If you sell or exchange capital assets, let it be known that the short-term gains remains at 12%. Also, long-term gains from the sale or exchange of collectibles (after a 50% deduction) conitnues to be at 12%.

Gambling Loss Deduction

Did you take a gamble this year and lose? For the Massachusetts taxpayer, you should note that the new gambling loss deduction is the only deduction for gambling losses permitted. Massachusetts does not take up with the federal deduction under IRC § 165(d) for gambling losses.

A deduction  from Part B income for gambling losses experienced at certain Massachusetts licensed (under General Laws chapter 23K) gaming establishments, this includes racing meeting licensee or simulcasting licensee establishments. However, this is only limited to winnings from such Massachusetts establishments. This includes gross income for the calendar year and the deduction is claimed on Schedule Y.

Health Insurance, Penalty for Failure to Purchase – Tax Year 2015

Individuals who can afford health insurance in accordance with the law but do not act on it are subject to penalties for each month of non-compliance in the tax year. The exception is the provision for no penalty in the case of a gap in coverage of 63 consecutive days or less. The penalty will not be more than 50% of the minimum monthly insurance premium the individual would have been eligible for had they participated in the Connector, and will be enforced through the individual’s personal income tax return upon filing.

The Massachusetts Health Care Reform Act insists that an adult 18 and over who has access to affordable health insurance to purchase it. In 2015, individuals had to be enrolled in health insurance policies that meet minimum approved coverage standards according to the guidelines approved by the Commonwealth Health Insurance Connector Authority (the Health Connector).

These penalties apply only to adults who are considered able to afford health insurance according to Massachusetts guidelines. Annually, the Health Connector sets up individual criteria that decides if individuals, married couples and families can afford health insurance This is according to their incomes and affordable health insurance premiums. Those who are not deemed able to afford health insurance according to the Massachusetts benchmarks will not be penalized. An appeal process is available to file with the Connector stating any hardship that may inhibit them from buying health insurance. If that is the case, they may have to pay a tax penalty).

Real Estate Tax Credit for Persons Age 65 and Older (Circuit Breaker)

Certain taxpayers age 65 or older may be eligible to claim a refundable credit on their state income taxes for the real estate taxes or rent paid during the tax year on the residential property they own or rent in Massachusetts that is used as their principal residence. If the credit due the taxpayer exceeds the amount of the total income tax payable for the year by the taxpayer, the excess amount of the credit will be refunded to the taxpayer without interest. For tax year 2015, the maximum credit allowed for both renters and homeowners is $1,070.
To be eligible for the credit for the 2015 tax year: the taxpayer or spouse, if married filing jointly, must be 65 years of age or older at the close of the 2015 tax year; the taxpayer must own or rent residential property in Massachusetts and occupy the property as his or her principal residence; the taxpayer’s “total income” cannot exceed $57,000 for a single filer who is not the head of a household, $71,000 for a head of household, or $85,000 for taxpayers filing jointly; and for homeowners, the assessed valuation as of January 1, 2015, before residential exemptions but after abatements, of the homeowner’s personal residence cannot exceed  $693,000.

Conclusion

Take these 2015 tax changes seriously, the State does. If your returns have not yet been completed, please all Alex Franch, BS EA at 781.849.7200 right away so that he can schedule an appointment and/or file an extension if necessary. You can also schedule an appointment at one of Worthtax’s locations in Quincy, Weymouth and Dedham.

Sources and Resources

Funny Money: Four Odd Types of Taxable Income
Itemized Deductions: Should I Itemize My Tax Deductions
Employer Relief: Affordable Care Act
2014 Income Tax Impact of the Affordable Care Act (ACA) in a NutshellHealth Insurance: Ways to Deduct
Health Insurance Plans: Beware of Penalties
Tax Changes for 2015 – Commonwealth of Massachusetts

 

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Broncos Win Super Bowl 50 – California Wins With Jock Tax

bronchos winBroncos win of Super Bowl 50 was a surprise to some. Not to me, they had a tight defense. I just hope their defense was just as good when planning to pay the Jock Tax.

Superbowl 50 was in California this year. California is one of those states that charges a “jock tax.” I know your are moaning, are you kidding me? A Jock Tax? It’s true! Payton Manning will have a hefty amount to share with the state after the Broncos win. But take comfort, the referees will be subject too.

Just like you may earn overtime or a bonus at your job, these Bronco and Panther athletes make a hefty bonuses for the playoffs and Superbowl. The athletes who play for the Broncos, Panthers or our beloved Patriots are subject to taxes on a State and local basis. This makes their taxes are very complicated. They have to have a really good CPA on their team. Hum, they should call Worthtax!

Since these athletes play in many cities throughout the US, each city may have a local tax imposed. And, each city is located in a state that may require a jock tax on a portion of their multi-million dollar contracts. This jock tax, another form of income tax, is not only collected where they are based, but also where they live.

Oh, and when we say the Broncos win got them a big, beautiful ring? They they may be taxed on the that as well. I guess in the end, we can really say, California won.

Each State Has Their Own Tax Rules

States tax all earnings of the residents residing in that state. However what about non-residents? That is not always the case. In Massachusetts, nonresidents are taxed on the income that results from sources within the Commonwealth.

Some states will tax nonresident income. Chances are if a city (and state they are located in) hosts a large NFL, NBA, NHL or other major league sports events, then it is likely that they have the jock tax. It is just one more opportunity for generating revenue, I guess you can say.

Not All Fun and Taxes When Broncos Win or Lose

You may ask yourself, “Why don’t more athletes live in Massachusetts?” Guess what?  Massachusetts has a jock tax. Think about it, we are home to the New England Patriots, the Boston Red Sox, Boston Celtics and New England Revolution. That is a lot of tax revenue to be made for the Commonwealth. States that do not have a jock tax are Florida, Washington, Texas and Tennessee. That is why those states, especially Florida, are able to successfully recruit those big names and keep them as residents. And I bet you thought the awesome weather was the only reason that athletes live in Florida? Well, partially, but professional athletes, who live in Florida do not have to pay taxes against the income they earn playing there.

So when a player happens to mention they would rather play in one city rather than another, it may not be due to loyalty or rivalry. Although, we would like to think that. They very well could be thinking about their tax return. Keep that in the back of your mind the next time you play fantasy football.

Regardless of the Broncos Win – We don’t discriminate if you are subject to a Jock Tax

Professional NFL player or not, we are here to help you sort through your taxes. Call Alex at 781.849.7200 . Worthtax has a sign-on bonus of our own. In addition to our guaranteed pricing, we are giving $50 American Express gift cards to any new clients who have their taxes completed and filed by WorthTax. Worthtax provides ultra-convenient service and triple check accuracy. We have locations in Quincy, Weymouth and Dedham. Although, if you are a Broncos’ fan and you booed our beloved Patriots, well … don’t do it again!

Superbowl 50 Fun Fact

What is Superbowl 50 without the commercials? Did you know that advertising for Superbowl 50 will generate $377 Million in advertising revenue. Imagine paying taxes on that!

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photo credit: Denver Broncos 2008 Schedule Wallpaper via photopin (license)
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