Medical Deductions

Medical Deductions 

It is well known that medical expenses are deductible. But what does that include? Read below for often missed additions to your medical costs.

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1. Dental Costs - Be sure to include costs paid to dentists including dental surgery and cleanings.

2. Vision - Do you have glasses or contacts? Deduct it!

3. Health Insurance Premiums - You likely pay a health insurance company every month.  It may be deducted out of our paycheck automatically.  These payments should be included in your total.

4. Medical Equipment - Add the costs of items such as wheelchairs, crutches, hearing aids, and diabetic supplies.

5. Transportation/Mileage - Did you drive or pay for transportation to a medical facility?  Deduct the costs or apply the medical mileage rate!

6. Prescriptions - If a doctor prescribes you medicine, it is a medical expense.

Have a question about medical deductions? 

Ask us through our website or give us a call at (216) 661-4459

 

Did you pay the Obamacare Penalty last year?

Did you pay the Obamacare Penalty last year?

There's a good chance you overpaid!

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Beginning in 2014, the Affordable Care Act installed a penalty for individual taxpayers that fail to secure health insurance for themselves and family.  This was well covered by the media.

What was not well covered is that there are many situations that exempt a person from actually paying the penalty.  

In tax year 2014, over 300,000 taxpayers overpaid their shared responsibility fine.  Of that, 83% didn't need to pay at all.  Below are some of the most common exemptions taxpayers qualify for:

• Insurance is Unaffordable - No penalty due if local insurance rates were a certain percentage of your income.  
• Housing Troubles - An exemption exists for people that were facing eviction or foreclosure.
• Medical Debt - If you had a large amount of unpaid medical bills that prevented the affordability of health insurance, you can qualify for an exemption.
• Death of a Family Member - Fine is waived for individuals who were unable to get insurance while caring and paying for a terminally ill family member. 

There are many more exemptions available as well.  If you overpaid last year or have questions about this year, contact us! By phone (216) 661-4459 or through our website. 

Identity Theft and Scams

Identity Theft and Scams

Warning Signs
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 Over the past year we have heard of many horror stories concerning IRS scams and identity theft.  Below are some helpful tips to recognize some of the common warning signs.

1.  The IRS will not e-mail you.  They are concerned for your privacy and know that e-mail accounts can be read by more people than just the taxpayer.

2.  The IRS will not call you on the phone unless they are calling you back.  They communicate primarily through paper mail.  Besides, how would they have obtained your phone number if you didn't call them first?

3.  Tax authorities will never threaten you angrily or require actions to be completed in one day. Often the scammers will say "the police are on their way right now, unless you pay the balance immediately".  The bad guys thrive on getting you to act before you have had time to sit and think about what is happening.  

4.  You will never be asked to pay tax using a prepaid credit card. They typically will only accept check or direct deposit.

Are you unsure if a communication is legitimate or a scam?  Call us immediately BEFORE you respond! (216) 661-4459 or e-mail philip@rockcitytax.com.

Education Tax Credits

Education Tax Credits

Brief Summary 

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Do you pay for the higher education of yourself or a dependent?  We would like to offer our sympathies for the loss your wallet has likely felt.  Allow us to offer a small conciliation. The IRS offers some great tax credits/deductions that offset much of the financial pain most families have felt.  Review this brief outline to see if any of these credits apply to you!

American Opportunity Tax Credit
Receive up to $2,500 in tax credits per student! This credit applies to individuals that have paid for tuition, fees, and books for them self or a dependent. The education must be for the first 4 years of higher education, must be in pursuit of a degree, and is phased out for higher income families.

Lifetime Learning Credit
Worth up to $2,000 per tax return.  It applies to all higher education including vocational schools and does not necessarily have to be attached to a degree (for instance, career advancement).  This credit is phased out for higher income families.

Student Loan Tax Deduction   
Did you make payments on a student loan in 2015?  You should receive a form 1098-E in the mail.  This will give you the amount of interest included in your payments that may be deducted.

College Funds (529 Savings Plans) 
 529 Savings Plans are a great way to store your child's college fund.  Contributions are deductible on your Ohio (and most other states) tax return and income is generated within the account federal and state tax free. 

More questions?  Do not hesitate to ask! Contact Us