Publication 17

Publication 17 is now available online.  http://www.irs.gov/pub/irs-pdf/p17.pdf

New Volunteer Training

New Volunteer Training starts January 3 at 9:00 am to 4:00 pm.  Training will be held at the Hawks Prairie Campus of South Puget Sound Community College.

New Volunteer Orientation

I have scheduled an Orientation for New Volunteers.  It will be held on December 11, 2014 from 1:00 - 3:00 pm.  The meeting will be at:

Housing Authority Thurston County

Conference Room

1206 12th Avenue SE

Olympia WA 98501

 

You will be able to pick up your training materials here.  We will also instruct you on how to use the TaxWise Online program and prepare you for the January training.

State Meeting

I just finished 3 days of meetings at the District Coordinators Training Meeting in Lynwood.  The main subject we will be learning is the Affordable Care Act.  We don't have all the information yet but it sounds like it will be fairly easy to work with.  Looks like we will be loosing some credits such as Sales and Tax Deduction, Teacher Expense $250, Mortgage Insurance Premiums and a few others.

State Website

It is a work in progress but a great start!

http://taxaidewa.org/

Tax Credits for Higher Education

Just a note that in order to claim these credits we MUST have a 1098-T from the student.

Two Tax Credits Help Pay Higher Education Costs

Did you, your spouse or your dependent take higher education classes last year? If so, you may be able to claim the American Opportunity Credit or the Lifetime Learning Credit to help cover the costs. Here are some facts from the IRS about these important credits.

The American Opportunity Credit is:

• Worth up to $2,500 per eligible student.
• Only available for the first four years at an eligible college or vocational school.
• Subtracted from your taxes but can also give you a refund of up to $1,000 if it’s more than your taxes.
• For students earning a degree or other recognized credential.
• For students going to school at least half-time for at least one academic period that started during the tax year.
• For the cost of tuition, books and required fees and supplies.

The Lifetime Learning Credit is:

• Limited to $2,000 per tax return, per year, no matter how many students qualify.
• For all years of higher education, including classes for learning or improving job skills.
• Limited to the amount of your taxes.
• For the cost of tuition and required fees, plus books, supplies and equipment you must buy from the school.

For both credits:

• Your school should give you a Form 1098-T, Tuition Statement, showing expenses for the year. Make sure it’s correct.
• You must file Form 8863, Education Credits, to claim these credits on your tax return.
• You can’t claim either credit if someone else claims you as a dependent.
• You can’t claim both credits for the same student or for the same expense, in the same year.
• The credits are subject to income limits that could reduce the amount you can claim on your return.
• Visit IRS.gov and use the Interactive Tax Assistant tool to see if you’re eligible to claim these credits.

See Publication 970, Tax Benefits for Education for more on this topic. You can get it on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

Boost Your Retirement Savings with a Tax Credit

Boost Your Retirement Savings with a Tax Credit

If you contribute to a retirement plan, like a 401(k) or an IRA, you may be eligible for the Saver’s Credit. The Saver’s Credit can help you save for retirement and reduce the tax you owe. Here are five facts from the IRS that you should know about this credit:

1. The Saver’s Credit is the short name for the Retirement Savings Contribution Credit. It can be worth up to $2,000 for married couples filing a joint return. The credit is worth up to $1,000 for single taxpayers.

2. Eligibility depends on your filing status and the amount of your yearly income. You may be eligible for the credit on your 2013 tax return if you’re:

• Married filing separately or a single taxpayer with income up to $29,500

• Head of household with income up to $44,250

• Married filing jointly with income up to $59,000

3. Other special rules that apply to the credit include:

• You must be at least 18 years of age.

• You can’t have been a full-time student in 2013.

• You can’t be claimed as a dependent on another person’s tax return.

4. You must have contributed to a 401(k) plan or similar workplace plan by the end of the year to claim this credit. However, you can contribute to an IRA by the due date of your tax return and still have it count for 2013. The due date for most people is April 15, 2014.

5. File Form 8880, Credit for Qualified Retirement Savings Contributions, to claim the credit. Tax software will do this for you if you e-file.

The Saver’s Credit is in addition to other tax savings you can get if you set aside money for retirement. For example, you may also be able to deduct your contributions to a traditional IRA.

TWO Blogs

Here are 2 TWO blogs you should look at regularly:

http://taxwiseonline.blogspot.com/

 

http://mytaxwise.blogspot.com/

Who Should File a 2013 tax Return

Issue Number:    IRS Tax Tip 2014-01

Inside This Issue

Who Should File a 2013 Tax Return?

Do you need to file a federal tax return this year? Perhaps. The amount of your income, filing status, age and other factors determine if you must file.
Even if you don’t have to file a tax return, there are times when you should. Here are five good reasons why you should file a return, even if you’re not required to do so:

1. Tax Withheld or Paid.  Did your employer withhold federal income tax from your pay? Did you make estimated tax payments? Did you overpay last year and have it applied to this year’s tax? If you answered “yes” to any of these questions, you could be due a refund. But you have to file a tax return to get it.

2. Earned Income Tax Credit.  Did you work and earn less than $51,567 last year? You could receive EITC as a tax refund if you qualify. Families with qualifying children may be eligible for up to $6,044. Use the EITC Assistant tool on IRS.gov to find out if you qualify. If you do, file a tax return and claim it.

3. Additional Child Tax Credit.  Do you have at least one child that qualifies for the Child Tax Credit? If you don’t get the full credit amount, you may qualify for the Additional Child Tax Credit. To claim it, you need to file Schedule 8812, Child Tax Credit, with your tax return.

4. American Opportunity Credit.  Are you a student or do you support a student? If so, you may be eligible for this credit. Students in their first four years of higher education may qualify for as much as $2,500. Even those who owe no tax may get up to $1,000 of the credit refunded per eligible student. You must file Form 8863, Education Credits, with your tax return to claim this credit.

5. Health Coverage Tax Credit.  Did you receive Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation? If so, you may qualify for the Health Coverage Tax Credit. The HCTC helps make health insurance more affordable for you and your family. This credit pays 72.5 percent of qualified health insurance premiums. Visit IRS.gov for more on this credit.

To sum it all up, check to see if you would benefit from filing a federal tax return. You may qualify for a tax refund even if you don’t have to file. And remember, if you do qualify for a refund, you must file a return to claim it.
The instructions for Forms 1040, 1040A or 1040EZ list income tax filing requirements. You can also use the Interactive Tax Assistant tool on IRS.gov to see if you need to file. The tool is available 24/7 to answer many tax questions.
Additional IRS Resources:

• Publication 596, Earned Income Credit
• Publication 972, Child Tax Credit
• Publication 970, Tax Benefits for Education
• Health Coverage Tax Credit

1040 Instructions

1040 instructions are now available online.    http://www.irs.gov/pub/irs-pdf/i1040.pdf

Returning Volunteers will receive theirs in the mail.  New Volunteers can get them from Kirsten or from the library.  I don't believe the printed ones have been mailed yet. 

Training for Returning Volunteers is Saturday January 18, 2014 at 9:00 am.  Training will be held at the Hawk's Prairie campus of South Puget Sound Community College.

Publication 4491-X is now available. This includes all the pen and paper changes to make to your training materials, as well as the answers to the training problems. http://www.irs.gov/pub/irs-pdf/p4491x.pdf