" Do You Know What is AMT According to IRS ? "

AMT is Alternate Minimum Tax per IRS Definition is a Flat Tax on the Taxable Income Above a certain Threshold.  For Taxpayers who make more than the Threshold Income, AMT is assessed. The AMT amount is added to Tax on Line  45 of Form 1040 and is computed using Form 6251 for TY 2015.  Some details about AMT:
1. When Taxable Income Plus Certain Adjustments Exceeds your Exemption Amount based upon Filing Status, Taxpayer pays AMT for TY 2015
2.  AMT Exemption Amount:
          Single or Head Of Household       $ 53, 600
          MFJ or QW                                   $ 83,400
          MFS                                               $ 41,700    
3.   AMT Exemption is phased out at certain Higher Income levels.

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" Who Pays Additional Medicare Tax ? "

Taxpayers whose Income Exceed Certain Limits, pay Additional Medicare Tax. List details:
1. Additional Medicare Rate -  0.9%
2. What Income is Subject to  Additional Medicare  Tax ?  Medicare Wages, Self Employment Income, & Railroad Retirement Compensation
3.  Threshold Amount:
         Filing  Status                                    Threshold Amount
   o        MFJ                                                    $250,000
   o        MFS                                                   $125,000
   o        Single                                                 $200,000
   o        HH                                                     $200,000
   o        QW ( 1 Child)                                      $200,000
4.    Withholding / Estimated  Tax -  Employers must withhold this Tax and Self Employed must include this in Estimated Tax Payments.
5.  Under Payment Penalty -  If you withhold too little Tax or didn't pay enough Estimated Tax,
IRS will impose Under Payment Tax Penalty.

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" Will IRS Provide Copies Of Fraudulent Returns to Victims? "

IRS Will provide ID Theft Victims copies of Fraudulent Returns. The hope is that Victims learn from these returns and understand how these were made and filed under their name. They can Guard against such future ID Theft attempts. The Victims can also learn how their personal and Financial information was obtained by the ID Thieves.
These fraudulent copies will be redacted  so that other SSN and Names are not provided to the Victim.

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" What is Saver's Credit ? "

If you contribute to 401(k) or IRA for TY2015, you might be able to claim the Saver's Credit - Also known as Retirement Savings Contribution Credit.  This is in addition to the Pre-tax dollars put away in the Retirement plans.
List Saver's Credit overview:
1. Credit Limit - Up to $4000 for MFJ, or $2000 for Single.  The credit rate reduces and phases out as income exceeds threshold levels.
2.  Income Limits
    o  MFJ  with Income less than $61,000
    o  HH   with Income less than $45,750
    o S or MFS with Income under $30,500
3. Other Qualification Criteria
    o Age must be under 18 Yrs.
    o You can't be Full time Student in 2015
    o  No Taxpayer can claim you as dependant on their Tax Return.
4.  Contribution Date - Before April 18, 2016 for TY2015 Saver's Credit.

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" What Are The Tax Implications Of Unemployment Benefits? "

Get Unemployment Benefits when you are out of a Job but what are its Tax Implications ?   Read Top Five Consequences Listed Below:

1.  Unemployment Compensation  - Is  Income and Taxable.  Expect Form 1099-G by Jan 31, of the Following Year.. It shows amount of Taxes Withheld if any.

2.  Paid Under Federal Or Sate Law - Various Types of Unemployment Compensation.  Tax Treatment varies depending upon its classification.

3. Union Benefits - Only Benefits in excess of Taxpayer Contribution are Taxable. 

4. Choose to Have Your Taxes Withheld - Use Form W-4V to Withhold Taxes. If you choose not to Withhold Taxes , You may need to make Estimated Tax Payments.

5. Visit irs.gov for more details.

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" What Deadlines For Foreign Income & Assets ? "

US Citizens must report World Wide Income On Federal Tax Return.  If you lived Outside the US  on the due date of Regular Return, your 2016 Tax Return Deadline is June 15, 2016.  Deadline to report interest in Foreign Financial Institutions is End of June 2016.

 A) FATCA Requirements - Referring to the Foreign Account Tax Compliance Act, US Citizen and Resident Aliens must report World Wide Income.  That is disclose Income from Foreign Accounts on Schedule B.

B) You may have to file form 8938 showing Statement of Special Foreign Financial Assets with your Tax Return.

C) FBAR Requirements - It refers to Form 114, Report of Foreign Bank & Financial Accounts. This is filed with Financial Crimes Enforcement Network (FinCEN) a bureau of Treasury Department.if the Aggregate value of the Account exceeds $10,000.  This includes any Signature authority  on the accounts.This form 114 is filed electronically separately from Tax Return. Deadline for filing Form 114 is June 30.

Failure to File these forms can result in $10,000 or more in  Penalties including Jail time.

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How Does The Net Investment Income Tax Affect Taxpayers ?

The Lesser of the Net Investment Income Or the Amount of your Gross Adjusted Income Exceeds the thresholds set by your Filing Status, that is used to determine the Excess Income. 3.8% of the Excess Income is the Net Investment Tax.

A)          Filing Status                                      Threshold Amount
        1.     Single of HOH                                          $200,000
        2.     MFJ                                                           $250,000
        3.     Qualifying Widower with Child             $250,000
        4.     MFS                                                           $125,000

B)   Net Investment Income Includes - Interest, Dividends, Capital Gains,  Rental & Royalty Income, Non-Qualified Annuities

C)   Excludes Income From- Wages, Self Employment, Unemployed Compensation,  Social Security Benefits, and Alimony.

D)   Fill out Form 8960 to see if the Net Investment Income Tax is applicable.

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What Is The Best Defence Against IRS Scams & ID Thefts ?

List some Simple Procedures Tax Payers can Implement to Prevent IRS Scams & ID Theft ?

1. Don't Reply Emails that request any Financial Data or Offer a Reward - IRS Never Sends emails.
2. Destroy Credit / Debit Card Offer letters that are Unused.
3. Destroy any Insurance or Financial Document  with *****4 Digit number on it.
4. Don't be Intimidated by Phone callers who Threaten with IRS/Legal/ Police Action.
5.  Note IRS Only Uses US Postal Service to communicate with Tax Payers.

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" What Are The Tax Effects Of Divorce or Separation ? "

Some of the major effects of a Divorce or Separation are discussed below:
1. Child Support:  Not Deductible to the Payer and Non-Taxable to the Recipient.
2. Alimony Paid:  If the Alimony payments are made under a Divorce or Separation Decree or Separation Agreement, they can be deducted as Alimony for Federal Tax Purposes.
3. Alimony Received:  Spousal Alimony is taxable in the Year received. So  Plan for additional Taxes or make additional Estimated Tax Payments to avoid the Tax Surprise.
4.  Spousal IRA: If there is a Final decree of Divorce or Separate Maintenance by the Year end, you can't deduct the Contribution made to the Former Spousal's Traditional IRA. However, you can deduct Contribution to Your own IRA.
5. Name Changes - If you change your name after your Divorce, notify Social Security Administration about the change. Fill out Form SS-5. Your name on the Tax Return must match the SSA records.  A name mismatch can delay tax refund.

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" How Much Gambling Losses Can You Deduct in Taxes? "

Tax payer Reports Gambling Winnings & Losses in the Tax Year they happened. Winnings From Lottery,  Horse Racing, Sports Betting, Horse Racing, and Casinos are Taxable events including Cash and Non-Cash prizes. Fair Market Value Of Cars And Trips are Reported.
1. Gambling Establishment gives W2G Form for the winnings and sends a copy to IRS if the Tax is withheld. Taxpayer gets W2G Form.  The Winnings are included as Ordinary Income for Tax Purposes.
2.  However, if there are Gambling Losses, they are Limited to the extent of Gambling Income. So, the Gambling losses in Excess of Gambling Income can't be claimed by the Tax Payer.
3.  Keep Gambling Receipts i.e. all winnings & Losses
4. How to Deduct such losses ?  Schedule A Itemized Deductions on your Tax Return.

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" What Disaster Tax Relief IRS Provides ? "

With Hurricane Season on the Horizon, it's good to know what Relief can IRS Provide if you live in a Federally Declared Disaster area. See the Tips & Help listed below:
1.  Make Disaster Preparedness Plan before the Hurricane Season Start.
2.  Special Tax Laws Apply the Federally Declared Disaster e.g IRS might Extend Tax Return  Filing Dead line.
3. Faster Refunds for the Disaster Losses related to the prior year Tax Return.
4. Refer to the Disaster Declaration Page for Tax Relief.
5. Go to Around The Nation Section on www.irs.gov Web site, to find the Local Tax News.
6.  For more Relief, visit the Page for Disaster Relief Resources for Charities and Contributors.

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" Are You A Victim Of Recent IRS Hack Attack ? "

Are you One of the 100,000 IRS Data Theft Victims whose ID was stolen by the Global Gang of Foreign Hackers to Steal 50 Million Refund Dollars ?. Actually 200,000 Fraudulent Attempts were made using IRS "Get Transcript" On Line Program for the Prior Year's Tax Returns. What should you do following this event ?   If You are Affected this is What IRS Suggests:

1.  IRS Will now provide Copies Of Fraudulent Returns to Victims.
1.  IRS Will provide Free Credit Monitoring Services for the 200,000 affected Taxpayers.
2.  Affected Taxpayers will be Flagged For The Upcoming And Future Tax Returns.
3.  Victims Qualify for Six-Digit Identity Protection Pin to Verify Identity when Filing Returns.
4.  Taxpayers should Stay Vigilant about their Accounts.
5.  Affected Taxpayers should take Advantage of the Free Credit Monitoring Services.
6.  IRS will provide Redacted Fraudulent Return Copies to Hack Victims

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" How to Respond Best to IRS Letter ? "

Tips on how to Best Respond to IRS Tax Letters and Notices:

1. Read the Tax Issue Raised by IRS Letter for the Appropriate Tax Year mentioned in the Notice.
2. Read Instructions In Letter For Proper Response e.g. Where ? when ? Address ?  Whom ? Issue ?
3. If IRS has made Changes To Your Tax Return, Review and Compare the Info. with your documentation.  If you agree with Changes Generally, you need not reply.
4. If You Disagree with Changes, then you must respond in a timely manner at the address in the notice.  Explain your reason for disagreement to IRS. Mail your reply with Bottom Tear Off from the Original Notice.  Generally reponse time is 30 days but comply with your letter time frame.
5.  Most IRS Notices can be answered by a phone to the Tel# in the letter.  Not necessary to visit IRS Center.
6.  Keep copy of all your IRS Correspondence and notices.
7.  Send Response to IRS Notice through US Mail  i.e. Certified Letter with Return Receipt
8.  If you can't Solve the Tax Issues in Phone calls Or IRS Center Visits, Arrange a Tax Specialist i.e. CPA or Enrolled Agent to Represent you as early as possible.
9.  Beware Of Scammers who Try to Advanage of you and Steal Your Personal Data For Identity Theft.

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" Did You Take Tax Return Amendment 101 Class ? "

List Suggestions about When a Tax Return should be Amended:
1.  Filing Status Errors
2. To Correct Income/ Deductions/Credits

You generally don't want to Amend Tax Return for the following:
a) Math & Missing Form Errors -  IRS will fix these for you.
b)  Health Insurance Market Place Form 1095-A Statement Errors.  IRS Might contact you for a copy of  Corrected Form 1095-A to verify the Information

Other Amendment Issues:
A)  Last date to Amend Return to Claim TY 2011 Refund was April 15, 2015.  If you have not claimed this Refund, now IRS owns it.
B)  Wait 16-20 weeks to Amend a Amended Return, since time to process the Amendment is around 16-20 weeks.
C) Amended Returns are Not Electronically Filed but are Paper Filed through US Mail System
D)  Submit Form 1040X to Amend Return along with updated schedules.
E)  Don't forget to include Form 1040X when CA Sate Return is amended.

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" What To Do If You Missed Tax Deadline ? "

If You Missed April 15th Tax Deadline, recommend the actions that Taxpayer can still take;
1. File Tax Return as soon as you can.
2.  Use IRS FreeFile e file your tax return.
3.  If your Income is less than $60,000 use Freefile for Brand Software To Fill Forms Electronically. This program is available until Oct 15, 2015.
4.  File Tax Return Electronically.
5.  If You owe Taxes, Pay as much as you can with the Tax Return.
6.  Explore Other Payment Options such as Installment Agreement.
7.  If you are getting Refund, file early to claim your refund.  If you don't file within Three Years you will lose your Refund to IRS.

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" How Defend Against Nation Wide Tax Scams ? "

Don't be Fooled by Tax Scammers Operating Nation Wide to Steal Your Identity or Refunds from Good Law Abiding Citizens. List Tips to Defend against such Scammers:

1. IRS Doesn't:
    o  Demand Immediate Payment or Threaten jail time without Prior  US Mail 
        Correspondence from Compliance or Enforcement Divisions after Tax Audit
        or Tax Collection Activities.
    o  Send Emailsto Tax Payers
    o  Ask For Credit/Debit Card Numbers on Phone.
    o  Threaten to Bring in Local Police to Arrest or Serve Jail time.

2. Report Tax Scammers to Treasury Inspector General For Tax Administration (TIGTA) at T: 1 800 366 4484

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" What To Do If You Receive Incorrect 1095-A & Premium Credit Forms ? "

If you Filed your Own Tax Return and Enrolled In Qualifying Market place Coverage using Form 1095-A, The Health Insurance Statement, and later learnt that there was there was error in 1095-A given to you, what should you do ?
1. You don't need to file Amended Tax Return even if you owe Taxes based upon corrected data.
2. IRS provides Tax Relief to the Tax Payers from Additional Tax Collection Actions.

Short answer is Do Nothing.

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" How To Get Saver's Credit ?"

You may claim Saver's Credit if you Contributed to  Retirement Plans such as IRA or 401(k). List details of Saver's Credit also called Retirement Savings Contribution Credit:
1. Maximum Credit:  
   Married Filing Jointly (MFJ)  =  $2000
   Single /MFS                            =  $1000
2. Income Limits:
    MFJ                         = $60,000
    Single / MFS           =  $30,000
    HH                          =  $45,000
3. Contribution Date:   April 15, 2015
4.  Other Qualifications:  18 Year Old, Not Full Time Student, Nobody can claim you as Dependent.
5.  Free File Program -  If you Qualify.

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" What Residential Energy Tax Credits Are Available ? "

For Home Energy Credits, list the details:
A) Residential Credit:
     1. Part of the Maximum Energy Savings Cost For Doors & Windows is 10% of the Invoice. The    maximum Energy credit is capped at 200$ for Windows and Doors.
     2.  Maximum Life Time Credit Limit is 500$ 
     3.  Energy Credit applies to your main home in US.
     4. Use Form 5695 to claim Residential Credit.
B) Efficient Property Credit:
    For Alternate Energy Efficient Property Credit such as water heaters, Solar etc. 30% of Invoice is Credit. There is no Credit limit. If your credit is more than the Tax  you owe, it can be carried forward to the following year.  This Credit is available through 2016.  Home must be is USA .

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" How Much & When To Contribute For TY2014 IRA Deduction ? "

For TY 2014 California Taxpayer Can Contribute to IRA up to April 15, 2015.  The Contribution Limits are Listed below:
1. Eligible Taxpayer can Contribute Up yo $5500 to IRA
2. For Taxpayers who are at least 50 Years, Contribution Limit is $6500
For IRA Account Withdrawals before 59 1/2 Years, there is Federal Penalty (10%) and CA Penalty (2.5%).
3. In Addition, you will also pay Federal & State Tax on the Amount Withdrawn.
    Have Tax Plan for this to avoid April 15, Tax Shock.

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