by Jim Magary | Aug 18, 2015 | Tax Help
College Tax Credits for 2015 and Years Ahead
With another school year just around the corner, the Internal Revenue Service today reminded parents and students that now is a good time to see if they will qualify for either of two college tax credits or other education-related tax benefits when they file their 2015 federal income tax returns.
In general, the American Opportunity Tax Credit or Lifetime Learning Credit is available to taxpayers who pay qualifying expenses for an eligible student.
Eligible students include the taxpayer, spouse and dependents.
The American Opportunity Tax Credit provides a credit for each eligible student, while the Lifetime Learning Credit provides a maximum credit per tax return.
Though a taxpayer often qualifies for both of these credits, he or she can only claim one of them for a particular student in a particular year.
To claim these credits on their tax return, the taxpayer must file Form 1040 or 1040A and complete Form 8863, Education Credits.
The credits apply to eligible students enrolled in an eligible college, university or vocational school, including both nonprofit and for-profit institutions.
The credits are subject to income limits that could reduce the amount claimed on their tax return.
To help determine eligibility for these benefits, taxpayers should visit the Education Credits Web page or use the IRS’s Interactive Tax Assistant tool.
Both are available on IRS.gov.
Normally, a student will receive a Form 1098-T from their institution by Jan. 31 of the following year. (For 2015, the due date is Feb. 1, 2016, because otherwise it would fall on a Sunday.)
This form will show information about tuition paid or billed along with other information.
However, amounts shown on this form may differ from amounts taxpayers are eligible to claim for these tax credits.
Taxpayers should see the instructions to Form 8863 and Publication 970 for details on properly figuring allowable tax benefits.
Many of those eligible for the American Opportunity Tax Credit qualify for the maximum annual credit of $2,500 per student.
Students can claim this credit for qualified education expenses paid during the entire tax year for a certain number of years:
• The credit is only available for four tax years per eligible student.
• The credit is available only if the student has not completed the first four years of post-secondary education before 2015.
Here are some more key features of the credit:
• Qualified education expenses are amounts paid for tuition, fees and other related expenses for an eligible student. Other expenses, such as room and board, are not qualified expenses.
• The credit equals 100 percent of the first $2,000 spent and 25 percent of the next $2,000. That means the full $2,500 credit may be available to a taxpayer who pays $4,000 or more in qualified expenses for an eligible student.
• Forty percent of the American Opportunity Tax Credit is refundable. This means that even people who owe no tax can get an annual payment of up to $1,000 for each eligible student.
• The full credit can only be claimed by taxpayers whose modified adjusted gross income (MAGI) is $80,000 or less. For married couples filing a joint return, the limit is $160,000. The credit is phased out for taxpayers with incomes above these levels.
No credit can be claimed by joint filers whose MAGI is $180,000 or more and singles, heads of household and some widows and widowers whose MAGI is $90,000 or more.
The Lifetime Learning Credit of up to $2,000 per tax return is available for both graduate and undergraduate students. Unlike the American Opportunity Tax Credit, the limit on the Lifetime Learning Credit applies to each tax return, rather than to each student.
Also, the Lifetime Learning Credit does not provide a benefit to people who owe no tax.
Though the half-time student requirement does not apply to the lifetime learning credit, the course of study must be either part of a post-secondary degree program or taken by the student to maintain or improve job skills.
Other features of the credit include:
• Tuition and fees required for enrollment or attendance qualify as do other fees required for the course. Additional expenses do not.
• The credit equals 20 percent of the amount spent on eligible expenses across all students on the return. That means the full $2,000 credit is only available to a taxpayer who pays $10,000 or more in qualifying tuition and fees and has sufficient tax liability.
• Income limits are lower than under the American Opportunity Tax Credit. For 2015, the full credit can be claimed by taxpayers whose MAGI is $55,000 or less. For married couples filing a joint return, the limit is $110,000.
The credit is phased out for taxpayers with incomes above these levels. No credit can be claimed by joint filers whose MAGI is $130,000 or more and singles, heads of household and some widows and widowers whose MAGI is $65,000 or more.
Eligible parents and students can get the benefit of these credits during the year by having less tax taken out of their paychecks. They can do this by filling out a new Form W-4, claiming additional withholding allowances, and giving it to their employer.
There are a variety of other education-related tax benefits that can help many taxpayers.
They include:
• Scholarship and fellowship grants — generally tax-free if used to pay for tuition, required enrollment fees, books and other course materials, but taxable if used for room, board, research, travel or other expenses.
• Student loan interest deduction of up to $2,500 per year.
• Savings bonds used to pay for college — though income limits apply, interest is usually tax-free if bonds were purchased after 1989 by a taxpayer who, at time of purchase, was at least 24 years old.
• Qualified tuition programs, also called 529 plans, used by many families to prepay or save for a child’s college education.
Taxpayers with qualifying children who are students up to age 24 may be able to claim a dependent exemption and the Earned Income Tax Credit
by Jim Magary | Aug 18, 2015 | Tax Help
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The 668A,668W
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by Jim Magary | Aug 18, 2015 | Tax Help
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6672 Penalty and the Trust Fund Penalty
a) General rule
Any person required to collect, truthfully account for, and pay over any tax imposed by this title who willfully fails to collect such tax, or truthfully account for and pay over such tax, or willfully attempts in any manner to evade or defeat any such tax or the payment thereof, shall, in addition to other penalties provided by law, be liable to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over.
No penalty shall be imposed under section 6653 or part II of subchapter A of chapter 68 for any offense to which this section is applicable.
(b) Preliminary notice requirement
(1) In general
No penalty shall be imposed under subsection (a) unless the Secretary notifies the taxpayer in writing by mail to an address as determined under section 6212 (b) or in person that the taxpayer shall be subject to an assessment of such penalty.
(2) Timing of notice
The mailing of the notice described in paragraph (1) (or, in the case of such a notice delivered in person, such delivery) shall precede any notice and demand of any penalty under subsection (a) by at least 60 days.
(3) Statute of limitations
If a notice described in paragraph (1) with respect to any penalty is mailed or delivered in person before the expiration of the period provided by section 6501 for the assessment of such penalty (determined without regard to this paragraph), the period provided by such section for the assessment of such penalty shall not expire before the later of—
(A) the date 90 days after the date on which such notice was mailed or delivered in person, or
(B) if there is a timely protest of the proposed assessment, the date 30 days after the Secretary makes a final administrative determination with respect to such protest.
(4) Exception for jeopardy
This subsection shall not apply if the Secretary finds that the collection of the penalty is in jeopardy.
Definition of wilfulness
1. The trust fund recovery penalty is a civil penalty; so the degree of wilfulness in failing to collect or pay over any tax leading to liability for this penalty is not as great as that necessary for criminal proceedings.
wilfulness in the context of the TFRP is defined as intentional, deliberate, voluntary, and knowing, as distinguished from accidental. “wilfulness” is the attitude of a responsible person who with free will or choice either intentionally disregards the law or is plainly indifferent to its requirements. Some factors to consider when determining wilfulness are:
• Whether the responsible person had knowledge of a pattern of noncompliance at the time the delinquencies were accruing;
• Whether the responsible person had received prior IRS notices indicating that employment tax returns have not been filed, or are inaccurate, or that employment taxes have not been paid;
• The actions the responsible party has taken to ensure its Federal employment tax obligations have been met after becoming aware of the tax delinquencies; and
• Whether fraud or deception was used to conceal the nonpayment of tax from detection by the responsible person.
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by Jim Magary | Aug 18, 2015 | Tax Help
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IRS Tax Levy, IRS Wage Garnishment Releases and Removals and case closing.
The IRS filed 1.8 million the bank and wage garnishment levies last year. IRS filed over 700,000 federal tax liens.
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Before IRS will release a tax levy, a wage garnishment or bank seizure, Internal Revenue Service will need a current documented financial statement. Your financial statement is the key to closing your case and settling your case.
If your case is in the automatic collection system, you will be filling out and documenting form 433F which you can find directly on our website. It is the only form the Internal Revenue Service will use.
When calling our office we will complete the form, speak to the Internal Revenue Service and within 24 hours of having your fully documented financial statement we can get your IRS tax levy released.
If the cases are in the local IRS office form 433 a will be required and a much more detailed investigation will be made on your current financial statement.
If this is the case a revenue officer out of the local office will be looking at your case.
Being a former IRS agent teaching instructors gives us a huge advantage and the benefit of our experience is invaluable to our clients. We know the system inside and out.
The filling out of your financial statement is critical into the settlement of your case.
With that current financial statement you will need to provide IRS the last three months of your bank statements, copies of your pay stubs and your monthly expenses. IRS does a thorough review of your financial statement therefore you want to make sure you are both honest and accurate. IRS has the ability to go back as far as they want for their financial review. 3 to 6 months is a general indicator of IRS’s review process.
As a general rule, IRS will not release your levy until all your tax returns are filed.
We can prepare all your back tax returns with little or no records.
Internal Revenue Service usually closes your case off the enforcement two general ways: Based on your current financial statement, IRS will put you in a currently uncollectible file or put you in a payment agreement.
Over 40% of collection cases wind up in a current tax hardship and 6.5 million other taxpayers are put into monthly installment payment plans.
IRS may fail to release an IRS tax levy wage garnishment or bank levy because taxpayers have failed to file back tax returns.
After the review of your IRS financial statement we can let you know whether you are a possible debt settlement candidate for the offer in compromise program.
One last note of interest, it is very critical all taxpayers respond to all IRS notices because IRS intends to follow-up on all the dates given on each and every notice sent.
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by Jim Magary | Aug 18, 2015 | Tax Help
We can get your IRS tax levy, IRS wage garnishment levy released within a 24-hour period of time and close your case at the same time. Since 1982, A plus rated.
We have a combined 60 years of direct work experience in the local, district, and regional tax offices of the Internal Revenue Service and know exactly how to settle your case with the Internal Revenue Service. We are true IRS and state tax experts.
As former IRS agents we taught tax law and tax procedure to new IRS agents, we know the system inside and out.
We are not a tax mill, we are professional tax firm . We have an immaculate and sterling reputation. We are comprised of tax attorneys, CPAs and former IRS agents.
Within 24 hours of receiving your fully documented financial statement we guarantee that you will have a release of your IRS bank levy or wage garnishment levy.
Settling Tax Debt through the OIC
We will speak with you about settling your tax debt to the offer in compromise program.
Our firm will not submit an offer in compromise until we walked through the offer in compromise pre-qualifier tool to make sure that you can settle your tax debt for pennies on dollar.
As a IRS revenue officer agent, I both work this program was a teaching instructor for the tax debt settlement program.
The Internal Revenue Service accepted 38,000 offers in compromise last year for average of $6500 per settlement.
Last year there were 78,000 offers in compromise filed. Please keep in mind this is a national average. Your current financial statement will determine the outcome for this program.
Taxpayers should be aware that there is a pre-qualifier tool for the offer in compromise program.
I suggest everyone the walk through this particular tool given by Internal Revenue Service to find out for a qualified candidate
The IRS Tax Levy, IRS Wage Garnishment Releases and Removals and case closings.
The IRS filed 1.8 million the bank and wage garnishment levies last year. IRS filed over 700,000 federal tax liens.
Before IRS will release a tax levy, a wage garnishment or bank seizure, Internal Revenue Service will need a current documented financial statement.
Your financial statement is the key to closing your case and settling your case.
If your case is in the automatic collection system, you will be filling out and documenting form 433F which you can find directly on our website. It is the only form the Internal Revenue Service will use.
When calling our office we will complete the form, speak to the Internal Revenue Service and within 24 hours of having your fully documented financial statement we can get your IRS tax levy released.
If the cases are in the local IRS office form 433 a will be required and a much more detailed investigation will be made on your current financial statement.
If this is the case a revenue officer out of the local office will be looking at your case.
Being a former IRS agent teaching instructors gives us a huge advantage and the benefit of our experience is invaluable to our clients.
With that current financial statement you will need to provide IRS the last three months of your bank statements, copies of your pay stubs and your monthly expenses.
IRS does a thorough review of your financial statement therefore you want to make sure you are both honest and accurate. IRS has the ability to go back as far as they want for their financial review. 3 to 6 months is a general indicator of IRS’s review process.
As a general rule, IRS will not release your levy until all your tax returns are filed.
We can prepare all your back tax returns with little or no records. Within a couple days we can do a complete tax reconstruction for any back tax years on unfiled tax returns.
Internal Revenue Service usually closes your case off the enforcement two general ways: Based on your current financial statement, IRS will put you in a currently uncollectible file or put you in a payment agreement.
Over 40% of collection cases wind up in a current tax hardship and 6.5 million other taxpayers are put into monthly installment payment plans.
IRS may fail to release an IRS tax levy wage garnishment or bank levy because taxpayers have failed to file back tax returns.
After the review of your IRS financial statement we can let you know whether you are a possible debt settlement candidate for the offer in compromise program.
We are true IRS tax experts. Call us today for free initial tax consultation
IRS Tax Levy Help + Stop IRS Bank Levies & Wage Garnishments + Settle IRS Tax Debt + UnFiled Back Taxes + STOP IRS + Peekskill, Saratoga, Elmira, Scarsdale, Rye
