As I’m sure you’ve heard me say before, it’s a good idea to check the accuracy of those tax statements you receive in the mail.
Well, on Friday the 20th (Friday afternoon being the perfect time for dumping this junk into the media), those of us who were paying attention found out that almost 1 million taxpayers who purchased Obamacare health insurance (the Affordable Care Act) don’t have to bother — their forms are wrong anyway! http://1.usa.gov/1Dets8r
Details are on that link above, but about 800,000 households will be contacted by HealthCare.Gov to let them know their information is wrong. And then another 100,000 or so in California were sent the wrong info as well (which was announced the previous week): http://cbsloc.al/1DeuiSv
Which means, of course, they’d like you to hold off on filing your federal return until all the info is correct. We should be able to access it by the end of the month.
This does NOT mean you can’t have us prepare your taxes. We will simply get all the rest of your information handled and prepared … and just as soon as we are able to input the correct information from Form 1095-A, we’ll fire it off to the ol’ Treasury Department.
We do, of course, want to make sure that you receive every deduction to which you are entitled! So, in the interest of jogging your memory from the year … here are some “interesting” 2014 tax deductions that you may or may not be aware of…
Let us know if we can help you with any of these: (530) 223-2277 or http://CPAReddingCA.com/contact
Fritz’s Top 11 Overlooked Tax Deductions for 2014
“The important work of moving the world forward does not wait to be done by perfect men.” – George Eliot
Have you thought about these …?
1) Pet Food and Veterinary Bills: You can deduct veterinary bills and pet food, only if they are for your foster pet. As an example, Jan Van Dusen, a California family lawyer, devoted most of her time outside of work caring for feral cats, 70 to 80 at one time. A tax court found that she was entitled to much of her claimed $12,068 in cat care expenses as a charitable deduction on her income taxes. In another case, Seawright v. Commissioner (http://1.usa.gov/1DexKfV), a couple ran a junkyard. They put out food to attract wild cats to control snakes and rats, making the junkyard safer for customers. When they claimed the cat food as a business expense, the IRS said no way. However, the tax court disagreed.
2) Moving Fido: If you are changing jobs and meet a couple of tests, you can deduct your moving expenses–including the cost of moving your dog, cat, or other pet from your old residence to your new home.
3) Swimming Pools: If swimming pools are used for medical purposes, as prescribed by a doctor, they can be tax-deductible. In Cherry v. Commissioner (http://bit.ly/1Deyf9T), the taxpayer had emphysema and installed a swimming pool after his doctor ordered an exercise regimen. The primary purpose of the pool was medical care, so he was able to deduct the pool, part of the cost of heating the pool, pool chemicals and part of insuring the pool area.
4) Fitness: Fitness is tax-deductible, if your doctor signs off on it, and tells you that your life might be in danger if you don’t start exercising and lose weight. The cost for remedies that help you drop a few pounds, improve your heart rate, or reduce your cholesterol might all be deductible.
5) Significant others: Couples who can claim their significant other as a dependent can also use them as a tax break. In order to do so, couples must have lived together for an entire tax year and the significant other must have an annual salary of less than $3,900. Also, the individual claiming the tax break must show they have paid for more than half of their significant other’s expenses. A total of $3,900 can be claimed if all the qualifications are met.
6) Deadbeat Friends: Did you lend a friend cash in a pinch, never to see the money again? Don’t despair–all is not lost. You can write off the unpaid amount if there’s no hope to collect payment.
7) Organ Donation: Organ donors can deduct not only any medical costs associated with the donation, but also costs of transportation.
8) Hunting: As long as business discussions are conducted and you are attempting to do business on the hunting trip, it would be possible to deduct this type of expense. However, these types of deductions may be heavily scrutinized.
9) Bariatric Surgery: The IRS ruled that obesity is a medical disease, which means that specific treatments aimed at curbing obesity are allowable deductions, including bariatric surgery. As with all medical expenses, you can only deduct unreimbursed expenses that exceed 10% (7.5% if over 65) of your adjusted gross income (AGI).
10) Addiction Treatment: Drinking, smoking, and drug abuse are serious medical hazards, so the IRS has ruled that you can write off expenses related to quitting. Eligible deductions can include the cost of any products or programs designed to help you quit, including nicotine patches or other aids. In-patient treatment at a drug or alcohol facility including meals, lodging and some transportation expenses can also be deducted as medical expenses. Additionally, transportation to and from meetings like Alcoholics Anonymous or Narcotics Anonymous, if attended based on doctor’s orders, can also be written off.
11) Bingo: Bingo-playing taxpayers can deduct the amount lost in a given year, up to the amount that was won. The IRS allows taxpayers to deduct losses for other types of wagering, too. To do so, they must keep a detailed diary of the kind of wager, where they placed it, who they were with, and how much they won or lost.
These are just a start to the sort of things that we can help you find in your tax year. Oh — your friends’ current software or tax professional didn’t help them find these? Hmm … maybe it’s time you helped them find someone who could?
I hope this helps.
Dennis Fritz CPA