Jul 17

Busy times in the office

The old Chinese proverb is “May you live in interesting times.” I can say that these have been interesting the last few weeks.

In my previous five years as an estate planning attorney, I have prepared eight applications for tax exempt status. (I believe one even got caught up in the IRS targeting scandal, even though it was a cemetery association because it took nearly sixteen months for approval.) But the last two months, I have had three applications.
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Of course, I appreciate the business, but when I see the help to the rural areas that these charitable organizations will do for our community, and the fervor for getting them started, it makes me really appreciate the tax planning side of the law.

Apr 20

Happy Easter!!

Just a wish of a Happy Easter to my clients, friends and family here in Altus, Blair, Hollis, Hobart, Frederick, and the rest Some of these medications are Fluoxetine (Prozac), Tranylcypromine (Parnate), Sertraline (Zoloft), Isocarboxazid (Marplan), Amitriptyline (Elavil), Amoxipine (Asendin), Clomipramine (Anafranil) etc. heritageihc.com levitra 20 mg Most of men expect to deal with erectile dysfunction later viagra soft 100mg in their life. cheap levitra 20mg The clinic trials of its vital ingredient – Sildenafil Citrate. The production cost of the medicine is low and lots of sildenafil tablets 50mg producing company is making the medicine and supplying it with enough blood. of southwest Oklahoma.

I pray that each of us remembers the sacrifice made on our behalf and that we live a life worth living.

Apr 17

Exemption from the Individual Health Care Mandate

Well, another tax season is finally over and I can get back to updating my website! With the final extension of the individual mandate to have qualifying health insurance having lapsed on March 31 (and those who had attempted by that time, extended to April 15), there a few thoughts that I wanted to let the tax and business minded people know, here in Altus, Oklahoma. Just because there is an individual mandate to buy insurance, there are still significant exceptions to the penalty that would be imposed on your 2014 taxes. These are as follows:

  • Have no affordable coverage options because the minimum amount you must pay for the annual premiums is more than eight percent of your household income, or
  • Have a gap in coverage for less than three consecutive months, or
  • Qualify for an exemption for one of several other reasons, including having a hardship that prevents you from obtaining coverage or belonging to a group explicitly exempt from the requirement.

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Mar 24

Tips on Deducting Charitable Contributions

From the IRS (with commentary from your local estate planning/probate attorney in Altus in red):

If you are looking for a tax deduction, giving to charity can be a ‘win-win’ situation. It’s good for them and good for you. Here are eight things you should know about deducting your gifts to charity:

1. You must donate to a qualified charity if you want to deduct the gift. You can’t deduct gifts to individuals, political organizations or candidates. (Good advice. In addition, you need to remember that not all tax-exempt organizations are “qualified charities.” An example of such an organization is one involved in lobbying.)

2. In order for you to deduct your contributions, you must file Form 1040 and itemize deductions. File Schedule A, Itemized Deductions, with your federal tax return. (The standard deduction this year for a single individual is $6,100 and $12,200 for married couples. In addition, if you are older than 65 or blind, there can be an additional $1,200 or $1,500 on top of that. So, you may not get a benefit from such a donation.)

3. If you get a benefit in return for your contribution, your deduction is limited. You can only deduct the amount of your gift that’s more than the value of what you got in return. Examples of such benefits include merchandise, meals, tickets to an event or other goods and services.

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5. Used clothing and household items generally must be in good condition to be deductible. Special rules apply to vehicle donations.

6. You must file Form 8283, Noncash Charitable Contributions, if your deduction for all noncash gifts is more than $500 for the year.

7. You must keep records to prove the amount of the contributions you make during the year. The kind of records you must keep depends on the amount and type of your donation. For example, you must have a written record of any cash you donate, regardless of the amount, in order to claim a deduction. It can be a cancelled check, a letter from the organization, or a bank or payroll statement. It should include the name of the charity, the date and the amount donated. A cell phone bill meets this requirement for text donations if it shows this same information.

8. To claim a deduction for donated cash or property of $250 or more, you must have a written statement from the organization. It must show the amount of the donation and a description of any property given. It must also say whether the organization provided any goods or services in exchange for the gift.

Mar 20

Update from the IRS on the Individual Mandate for Health Insurance

This was recently sent to my by the IRS relating to the Obamacare individual mandate. Since I wrote about the topic earlier this week, I thought I would post this to show more recent updates.

Starting January 2014, you and your family must either have health insurance coverage throughout the year, qualify for an exemption from coverage, or make a payment when you file your 2014 federal income tax return in 2015. Many people already have qualifying health insurance coverage and do not need to do anything more than maintain that coverage in 2014.

Qualifying coverage includes coverage provided by your employer, health insurance you purchase in the Health Insurance Marketplace, most government-sponsored coverage, and coverage you purchase directly from an insurance company. However, qualifying coverage does not include coverage that may provide limited benefits, such as coverage only for vision care or dental care, workers’ compensation, or coverage that only covers a specific disease or condition.

You may be exempt from the requirement to maintain qualified coverage if you:

  • Have no affordable coverage options because the minimum amount you must pay for the annual premiums is more than eight percent of your household income,
  • Have a gap in coverage for less than three consecutive months, or
  • Qualify for an exemption for one of several other reasons, including having a hardship that prevents you from obtaining coverage, or belonging to a group explicitly exempt from the requirement.

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A special hardship exemption applies to individuals who purchase their insurance through the Marketplace during the initial enrollment period for 2014 but due to the enrollment process have a coverage gap at the beginning of 2014.

For any month in 2014 that you or any of your dependents don’t maintain coverage and don’t qualify for an exemption, you will need to make an individual shared responsibility payment with your 2014 tax return filed in 2015.

However, if you went without coverage for less than three consecutive months during the year you may qualify for the short coverage gap exemption and will not have to make a payment for those months. If you have more than one short coverage gap during a year, the short coverage gap exemption only applies to the first.

If you (or any of your dependents) do not maintain coverage and do not qualify for an exemption, you will need to make an individual shared responsibility payment with your return. In general, the payment amount is either a percentage of your income or a flat dollar amount, whichever is greater. You will owe 1/12th of the annual payment for each month you (or your dependents) do not have coverage and are not exempt. The annual payment amount for 2014 is the greater of:

  • 1 percent of your household income that is above the tax return threshold for your filing status, such as Married Filing Jointly or single, or
  • Your family’s flat dollar amount, which is $95 per adult and $47.50 per child, limited to a maximum of $285.

The individual shared responsibility payment is capped at the cost of the national average premium for the bronze level health plan available through the Marketplace in 2014. You will make the payment when you file your 2014 federal income tax return in 2015.

For example, a single adult under age 65 with household income less than $19,650 (but more than $10,150) would pay the $95 flat rate.  However, a single adult under age 65 with household income greater than $19,650 would pay an annual payment based on the 1 percent rate.

More Information

Find out more about the individual shared responsibility provision, as well as other tax-related provisions of the health care law at www.irs.gov/aca.