Tax Prepretion Essay

4268 words - 18 pages

What's New This Year
Publication 5101
All tax preparers, Quality Reviewers, instructors, and Site Coordinators must pass the Intake/Interview and Quality Review test.
Income
Virtual Currency
The IRS announced that convertible virtual currencies, such as Bitcoin, would be treated as property and not as currency, thus creating immediate tax consequences for those using Bitcoins to pay for goods and services. Taxpayers having transactions in virtual currencies are out of scope for the VITA/TCE programs.
Standard Deduction
The standard deduction for taxpayers who do not itemize deductions on Form 1040, Schedule A, has increased. The standard deduction amounts for 2015 are:
* Married ...view middle of the document...

Health Savings Accounts
Health Savings Account (HSA) Deduction
The annual contribution limits on deductions for HSAs has been increased in 2015 to $3,350 for self-only coverage and $6,650 for family coverage.
Affordable Care Act
Refer to the Affordable Care Act lesson in Publication 4491; Publication 5157 is no longer available.
Taxpayers may receive new Forms 1095-B, Health Coverage, or 1095-C, Employer-Provided Health Insurance Offer and Coverage, from their insurance provider or employer. See the ACA lesson for information about these forms and other changes.
Retirement Savings Contribution Credit
Retirement Savings Contribution Credit Income Limits Increased
In order to claim this credit, your MAGI must not be more than $30,500 ($61,000 if Married Filing Jointly; $45,750 if Head of Household).
Education Benefits
American opportunity credit is reduced for taxpayers with modified adjusted gross income in excess of $80,000 ($160,000 for a joint return). There is no change from 2014.
Lifetime learning credit is reduced for taxpayers with modified adjusted gross income in excess of $55,000 ($110,000) for a joint return.
Student loan interest deduction begins to phase out for taxpayers with modified adjusted gross income in excess of $65,000 ($130,000 for joint returns) and is completely phased out for taxpayers with MAGI of $80,000 or more ($160,000 or more for joint returns). There is no change from 2014.
Due Date of Return
The due date for the U.S. Individual Income Tax Return for Tax Year 2015 is April 18, 2016.
Earned Income Credit (EIC)
For 2015, the maximum credit is:
* $6,242 with three or more qualifying children
* $5,548 with two qualifying children
* $3,359 with one qualifying child
* $503 with no qualifying child
To be eligible for a full or partial credit, the taxpayer must have earned income of at least $1 but less than:
* $47,747 ($53,267 if Married Filing Jointly) with three or more qualifying children
* $44,454 ($49,974 if Married Filing Jointly) with two qualifying children
* $39,131 ($44,651 if Married Filing Jointly) with one qualifying child
* $14,820 ($20,330 if Married Filing Jointly) with no qualifying child
Investment Income
Taxpayers whose investment income is more than $3,400 cannot claim the EIC.

New Legislation
The Trade Preferences Extension Act of 2015 includes the following provisions that are in-scope for the VITA/TCE program:
* Congress passed a law in June 2015 that affects Form 1098-T and the American opportunity and lifetime learning credits beginning in tax year 2016. There are no changes for claiming an education credit for tax year 2015.
* Child tax credit is not refundable for taxpayers electing to exclude foreign earned income from tax
Applies to taxable years beginning after December 31, 2014.
The Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE Act) was enacted on December 19, 2014, as part of...

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