Did you know?

– Statute of Limitation does not run if return is not filed and statute of limitation on collecting tax deficiency is suspended while the taxpayer is outside the U.S.?

– The common Canadian planning of TFSA does not work well for U.S. citizens? It is treated as a foreign trust and subject to reporting on forms 3520A and 3520.

– The common Canadian planning of RESP does not work well for U.S. citizens? It is treated as a foreign trust and subject to reporting on forms 3520A and 3520.

– Canadian Estate freeze planning tools can result in both U.S. gift and income tax consequences for U.S. citizens?

– The U.S. tax law does not recognize the concept of capital dividends and as a result, capital dividends are treated as any other dividends?

– The U.S. does not recognize the $800,000 capital gain deduction

– The U.S. excludes $250,000 from gain on sale of principle residence only? Any additional gain is then taxable.

– Medical expenses are deductible as an itemized deduction. These deductions are available only to the extent they exceed 7.5% of the taxpayer’s adjusted gross income.

– You are considered a U.S. citizen if you are born in the U.S. or if you are born in Canada to two U.S. citizens?

– You can not renounce your U.S. citizenship until you file the last five years of U.S. taxes with the IRS?

– U.S. persons with financial interest in or signature authority over foreign bank accounts exceeding $10,000 must report on a specified form to the U.S. Department of Treasury before June 30 of the following year?

– When a U.S. person hold interest in a specified foreign financial asset in excess of specified thresholds, that person is required to report “Statement of Specified Foreign Assets” with the 1040?

Six Tips on Who Should File a Tax Return

Most people file their tax return because they have to, but even if you don’t, there are times when you should. You may be eligible for a tax refund and not know it. This year, there are a few new rules for some who must file. Here are six tax tips to help you find out if you should file a tax return:

1. General Filing Rules. Whether you need to file a tax return depends on a few factors. In most cases, the amount of your income, your filing status and your age determine if you must file a tax return. For example, if you’re single and 28 years old you must file if your income was at least $10,150. Other rules may apply if you’re self-employed or if you’re a dependent of another person. There are also other cases when you must file. Go to IRS.gov/filing to find out if you need to file.

2. New for 2014: Premium Tax Credit. If you bought health insurance through the Health Insurance Marketplace in 2014, you may be eligible for the new Premium Tax Credit. You will need to file a return to claim the credit. If you purchased coverage from the Marketplace in 2014 and chose to have advance payments of the premium tax credit sent directly to your insurer during the year you must file a federal tax return. You will reconcile any advance payments with the allowable Premium Tax Credit. You should receive Form 1095-A, Health Insurance Marketplace Statement, by early February. The new form will have information that will help you file your tax return.

3. 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.

4. Earned Income Tax Credit. Did you work and earn less than $52,427 last year? You could receive EITC as a tax refund if you qualify with or without a qualifying child. You may be eligible for up to $6,143. Use the 2014 EITC Assistant tool on IRS.gov to find out if you qualify. If you do, file a tax return to claim it.

5. 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.

6. American Opportunity Credit. The AOTC is available for four years of post secondary education and can be up to $2,500 per eligible student. You or your dependent must have been a student enrolled at least half time for at least one academic period. Even if you don’t owe any taxes, you still may qualify. However, you must complete Form 8863, Education Credits, and file a return to claim the credit. Use the Interactive Tax Assistant tool on IRS.gov to see if you can claim the credit. Learn more by visiting the IRS’ Education Credits Web page.

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.

The Health Care Law and Filing Your Tax Return

It’s always a good idea to prepare early to file your federal income tax return. Certain provisions of the Affordable Care Act – also known as the Health Care Law – will probably affect your federal income tax return when you file this year.
You or your tax professional should consider preparing and filing your tax return electronically. Using tax preparation software is the easiest way to file a complete and accurate tax return.

Here are five things you should know about the health care law that will help you get ready to file your tax return.

Coverage requirements

The Affordable Care Act requires that you and each member of your family have qualifying health insurance coverage for each month of the year, qualify for an exemption from the coverage requirement, or make an individual shared responsibility payment when filing your federal income tax return.

Reporting requirements

Most taxpayers will simply check a box on their tax return to indicate that each member of their family had qualifying health coverage for the whole year. No further action is required. Qualifying health insurance coverage includes coverage under most, but not all, types of health care coverage plans. Use the chart on to find out if your insurance counts as qualifying coverage.

For a limited group of taxpayers -those who qualify for, or received advance payments of the premium tax credit – the health care law could affect the amount of tax refund or the amount of money they may owe when they file in 2015. Visit  here to learn more about the premium tax credit.

Exemptions

You may be eligible to claim an exemption from the requirement to have coverage. If you qualify for an exemption, you will need to complete the new IRS Form 8965, Health Coverage Exemptions, when you file your tax return. You must apply for some exemptions through the Health Care Insurance Marketplace. However, most of the exemptions are easily obtained from the IRS when you file your tax return. Some of the exemptions are available from either the Marketplace or the IRS.
If you receive an exemption through the Marketplace, you’ll receive an Exemption Certificate Number to include when you file your taxes. If you have applied for an exemption through the Marketplace and are still waiting for a response, you can put “pending” on your tax return where you would normally put your Exemption Certificate Number.

Individual Shared Responsibility Payment

If you do not have qualifying coverage or an exemption for each month of the year, you will need to make an individual shared responsibility payment when you file your return for choosing not to purchase coverage. Examples and information about figuring the payment are available on the IRS Calculating the Payment page.

Premium Tax Credits

If you bought coverage through the Health Insurance Marketplace, you should receive Form 1095-A, Health Insurance Marketplace Statement from your Marketplace by early February. Save this form because it has important information needed to complete your tax return.
If you are expecting to receive Form 1095-A and you do not receive it by early February, contact the Marketplace where you purchased coverage. Do not contact the IRS because IRS telephone assistors will not have access to this information.
If you benefited from advance payments of the premium tax credit, you must file a federal income tax return. You will need to reconcile those advance payments with the amount of premium tax credit you’re entitled to based on your actual income. As a result, some people may see a smaller or larger tax refund or tax liability than they were expecting. When you file your return, you will use IRS Form 8962, Premium Tax Credit (PTC), to calculate your premium tax credit and reconcile the credit with any advance payments.