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Comments on this website are informational in nature and are not intended to
be interpreted as specific tax advice.   The comments cannot be used to avoid taxes under the Internal Revenue Code or the regulations of other tax authorities. Furthermore, this website is not intended, and should not be interpreted, to support the promotion or marketing of any tax avoidance schemes.

 

Date last modified:
01/26/17

  • TAX FRAUD will rob you of precious dollars.  The IRS NEVER uses email or telephone calls to tell individual taxpayers that they owe money and must pay immediately.  You are always entitled to representation by a tax professional and/or attorney in order to determine the validity of the "claim".  DO NOT respond to these emails and DO NOT engage in conversation when a fraudster calls.  Also, protect your sensitive personal information so it cannot be stolen and a false tax return filed in your name.

  • Taxpayers can choose to donate all of their Oregon Kicker Refund to the Oregon State School Fund.  It will be considered a charitable contribution on the 2016 return.

  • The following credits and deductions have been made permanent starting with the 2015 Tax filing season -- $250 deduction for educators' expenses, state and local sales tax as an itemized deduction for those not deducting state income tax, charitable giving directly from an IRA and computer/technology costs now qualify as an education expense in calculating the education tax credits. 

  • Starting with the 2015 Tax Filing Year, Oregon no longer gives a credit to taxpayers paying for Long Term Care Policies.

  • The Oregon Form 40 Individual Tax Return will look very different starting with the 2015 Filing Year.  Many credits, additions and subtractions will be on a separate schedule.

  • The Affordable Care Act requires all taxpayers and their dependents have health insurance coverage.  Taxpayers and dependents without qualifying coverage will pay a penalty on their tax return unless they qualify for an exemption. 

  • Some high income taxpayers will be subject to a 3.8 percent Medicare Surcharge on investment earnings.  Households with incomes over $250,000 joint filers, $200,000 singles filers and $125,000 married filing separate will be assessed this tax on certain investment earnings.
  • Taxpayers with wages and/or self-employment net income greater than $200,000 single filers, $250,000 joint filers or $125,000 married filing separate will be subject to a .9% Medicare tax.  Employers cannot withhold the extra tax unless the employee earns $200,000 or more in a calendar year.  Taxpayers can opt for additional federal withholding to cover this surcharge.
  • Generally, the sale of personal residence is not taxable if certain conditions are met.  If the taxpayer's primary residence has been used as a rental, vacation or second home it has periods of "nonqualified use".  Taxpayers may not be able to exclude all the gain from the sale of a residence that has periods of nonqualified use.  Some states tax home sales when the seller lives in another state.
  • Debt Forgiveness/Cancellation can generate taxable income. Generally, this is reported on a 1099-C. It is important to include this information on your tax return, even if it turns out you don't have additional income to claim.
  • Selling online (such as via Ebay) is considered a taxable activity.  If you are a 'casual seller', meaning you sell occasionally without intent to make a profit, you probably don't need to report the activity.  If you are a more active seller, selling items at a profit or you are selling collectibles, you must report the income either as a hobby venture or a business.  Merchants will receive 1099-K forms reporting payments/income received from third-party handlers.
  • Barter and Trading for services and/or products is considered taxable income and must be counted as such.
  • The Child Tax Credit for 2015 federal returns is $1,000 per qualifying child age 16 and under. Your child who is 17-23 may still qualify for the dependency exemption on your personal return.

  • Health Savings Accounts (HSA) help alleviate the burden of medical expenses and provide some tax advantages. Only high deductible health insurance policies qualify.
  • You can open a Roth IRA for 2015 or contribute to an existing one up until April 15, 2016. The maximum annual contribution is $5,500 per year; after-tax dollars. Those over 50 can contribute an additional $1,000.  Earnings on your Roth are federally tax-free if your account has been open for five years and you are at least 59 years old. Contact Bill for more information on Roth IRAs.
  • The Retirement Saver's Credit  offsets the cost of contributions to IRAs, 401(k) plans and certain other retirement plans. The credit is figured as a percentage of the qualifying contribution; the maximum credit is $1,000, $2,000 for married filing joint.  On  2015 returns, the federal tax credit applies to Individuals filing as single with incomes up to $30,500; filing as head of household up to $45,750 and married couples up to $61,000. Other requirements are the taxpayer must be 18, not a full-time student and not claimed as a dependent on another person's return. 
  • For 2016, if you have a household employee, like a nanny or caregiver, you must report and pay payroll taxes when gross wages exceed $2,000 per year.
  • Oregon Residents can take advantage of a tax credit program to encourage more energy-efficient homes.  You must have a special state certificate to claim the credit on your tax return.  For more information, instructions on how to get the mandatory certificate and
    a list of eligible heating, air conditioning and water heating systems, go to: Oregon Department of Energy - Conservation Division Residential Energy Tax Credits .  Appliances and cars no longer qualify for a state tax credit.
  • Washington State residents do not pay individual income tax.  Businesses need to collect sales tax and fulfill other reporting requirements. Visit the Washington State Department of Revenue's website for more information.  If you are an Oregon-based business and conducting operations in Washington, you may be subject to sales and excise tax reporting and payments.
  • Absolutely, DO NOT ignore letters from the IRS or state revenue agencies. Respond promptly, or seek professional assistance, when information is requested. Procrastination can be costly because you can lose certain rights and even potential refunds by missing key deadlines.  Incorrect mailing address is never accepted as a reasonable excuse, so be sure to keep your mailing address current.
  • If you are chosen for a tax audit, it is important to realize you may need to prove some or all of your tax deductions.  If you file as Head of Household and/or receive Earned Income Credit, you may need to show that your provided a home to a dependent and/or supported a dependent.  You may need to provide records that substantiate the income you reported.  Be sure your records will stand up to scrutiny.
  • Employer's wishing to provide non-taxable fringe benefits for their employees can reference IRS Publication 15-B
  • Links to More Tax Tips and Information
         ◊
    Social Security
         ◊ HealthCare.gov
         ◊ Rental Income and Expenses
         
    Education Deductions and Tax Breaks
         
    Tips for Sole Proprietors and Business Owners
         
    Tax Filing Deadlines, Extensions and Quarterly Estimates
         
    Life Planning in the 21st Century
         ◊
    Important Documents to Keep

    • Resources You Can Use

      • You can download forms, publications and information from the IRS website. Go to www.irs.gov
         
      • For the Oregon Department of Revenue, go to http://www.oregon.gov/DOR/.  You should be able to access other states from the IRS website.
         
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