Iowa Accountant Tax Preparation
Preparing for Tax Season
"Taxes may be a burden, but the preparation shouldn't be."
It's hard to believe, but it's already a new year and tax season is here. We continue to see tax changes every year. Each of the last four years Congress has passed a late tax extender bill at the end of December, including again this year.
Everyone organizes income tax paperwork differently. A tax organizer might jog your memory on certain items you may have forgotten about over the course of the year. If you are interested in an organizer please contact our office.
We have included a few detailed hot topics below:
Qualifying Charitable Contributions
Qualifying charitable contributions must have a receipt. If the amount is over $250 you must have the following:
- Receipt acknowledging contribution dated prior to filing of return
- Date of the contribution
- Amount of contribution
- State that no goods or services were received in return for the contribution.
In the case of a benefit received for a contribution, the value of the benefit should be subtracted from the contribution. In addition, raffle tickets do not qualify as a charitable contribution even if the ticket is purchased through a qualified charity.
Health Insurance Requirement
Once again, individuals will be required to show they had health insurance during the year. If an individual does not have health insurance an additional tax penalty may be assessed. Although these penalties exist, there are exemptions such as life changing events. Small employers with health plans also have stringent requirements. Non-compliance could result in a $100 penalty per employee, per day, for not conforming to the new rules.
Affordable Care Act Surtaxes
Only a small % of Americans are subject to surtaxes. The surtaxes include, an additional 3.8% surtax on passive income (Interest, Dividends, Rental), and a .9% tax on earned income (W-2 or self-employment). More and more Americans will be affected by surtaxes each year. Participation in cafeteria plans (flex), employer retirement plans and accountable reimbursement plans reduce income when calculating surtaxes.
Medical Deductions
Out of pocket medical expenses including health insurance now have higher deduction thresholds. A quick glance at last year's income might determine whether or not your medical expenses will exceed 10% of your income. If expenses exceed, 10% it may be worth your time to summarize your expenses. If you are self-employed, health insurance premiums are still deductible as long as you show a profit.
Taxes can be complicated and confusing. Allen L Kockler Co.'s goal is to help you understand without being overwhelmed. We want you to leave satisfied with your tax service. Taxes may be a burden, but the preparation shouldn't be. We offer tax appointments, drop offs, and mail-ins and hope to work with you soon.
Allen L. Kockler Company is located at 1110 Sixth Street in Nevada. Hours are Monday-Friday from 8am-5pm. Allen L. Kockler Company can be contacted by phone at (515)-382-5481 or on the web at www.CentralIowaAccountant.com.