Every person needs to have health coverage or make a payment on their

federal income tax return called the “Shared Responsibility Payment.” Some people are exempt from making the Shared Responsibility payment. This application is for a category of exemptions called "hardships" available only through the Marketplace.

Hardship number Category Required documentation

1 You were homeless. None

2 You were evicted or were facing eviction or

foreclosure. Eviction or foreclosure notice. The document must show that the event happened

in this calendar year or up to two calendar years prior.

3 You received a shut-off notice from a utility company. Shut off notice from an electric, water/sewer, or gas utility company that says service has been or will be shut off. The document must show that the shut off happened in this calendar year or up to two calendar years prior.

4 You recently experienced domestic violence. None

5 You experienced the death of a close family

member. Death certificate, death notice from newspaper, funeral service program, funeral

expenses, coroner's report, military notification of death, or other official notice

of death. The document must show that the death happened in this calendar

year or up to two calendar years prior.

6 You experienced a fire, flood, or other

natural human-caused disaster that caused

substantial damage to your property.

Police or fire report, insurance claim, or other document from a government

agency or news source about the disaster. The document must show that the

event happened in this calendar year or up to two calendar years prior.

7 You filed for bankruptcy.

Bankruptcy filing document from a court or other legal authority. The document

must show that the bankruptcy happened in this calendar year or up to two

calendar years prior.

8 You had medical expenses you couldn't pay. One or more medical bills. The bill(s) must be for this calendar year or up to two calendar years prior.

9 You experienced unexpected increases in

necessary expenses due to caring for an ill,

disabled, or aging family member.

Receipts for bills or services related to a family member's care, like medical bills,

home care services, or transportation receipts. The receipts must be from this

calendar year or up to two calendar years prior.

10 A child you expected to claim as a tax dependent has been denied coverage in

Medicaid and the Children’s Health Insurance Program (CHIP), and another

person is required by court order to provide health coverage to the child.

Court order that covers the time period for which you want the exemption for the

child and copy of eligibility notice that shows the child was denied Medicaid and

CHIP coverage from your state. The Medicaid/CHIP document must show

eligibility determination for this calendar year or up to two calendar years prior.

11 As a result of a Health Insurance Marketplace or state-based Marketplace

appeals decision, you're eligible for: 1) enrollment in a qualified health plan through the Marketplace; 2) lower costs on your monthly premiums; or 3) cost-sharing reductions for a time period when you weren't enrolled in a Marketplace plan. Notice of appeal from the Health Insurance Marketplace or your state-based Marketplace. The appeals notice must be from this calendar year or up to two calendar years prior.

12 An adult in your tax household was determined ineligible for Medicaid because your state did NOT expand eligibility for Medicaid under the Affordable Care Act. None. This exemption is available only for the most recent calendar year.

13 You got a notice from a health insurance plan you purchased on the individual market

(not job based coverage) saying your policy was cancelled because it didn't meet Affordable Care Act requirements and you considered other plans unaffordable. This category is no longer available for 2017 and future years. Notice of cancellation from your insurance company must be dated after January 1, 2015 and before October 31, 2016. This exemption is not available if your coverage was cancelled after October 31, 2016.

14 You experienced a hardship NOT listed in categories 1-13 that kept you from getting

health insurance. A very limited number of other hardships qualify. Include any documentation

that explains why you’re requesting a hardship exemption NOT listed in categories 1-13. The documentation must show that the hardship happened within this calendar year or up to two calendar years prior.

The April 15th tax deadline is for customer who owe taxes to the IRS to avoid paying a late filing penalty. Taxes can be electronically filed until October every year. There are plenty of opportunities to continue earning revenue for your business after the mail filing season is over.

Self-employed customers

Self-employment encompasses activities such as landscaping, babysitting, car repair and hair styling. Customers need to keep detailed income and expense documentation to provide upon request by the IRS. (Babysitters can deduct expenses for food and toys. Landscapers can deduct mulch, mowers, trimmers, and gas.) Contact your Chamber of Commerce to see if they can provide a list of customers who have registered business in the last 18 months as they may still be looking for someone to assist with taxes. The following are benefits to reporting self-employment income.

 

Possible higher refunds for low earners

A customer may not qualify for full earned income benefits if W2 wages are too low. By earning extra income, customers may qualify for the additional benefits.

 

Build social security savings

Self-employed customers are considered the employer and the employee of their company and are responsible for both portions of the of social security taxes. Customers may be reluctant to report self-employment earnings because of the additional taxes but they are building their retirement income.

 

Organizations that offer assistance

Partner with people who work for organizations that assist people with referrals for your tax service.

Battered women’s shelter

County assessor’s office

Food pantry

Housing assistance

The IRS encourages all businesses and business owners to know the rules when it comes to classifying a worker as an employee or an independent contractor.

An employer must withhold income taxes and pay Social Security, Medicare taxes and unemployment tax on wages paid to an employee. Employers normally do not have to withhold or pay any taxes on payments to independent contractors.

Here are two key points for small business owners to keep in mind when it comes to classifying workers:

  1. Control. The relationship between a worker and a business is important. If the business controls what work is accomplished and directs how it is done, it exerts behavioral control. If the business directs or controls financial and certain relevant aspects of a worker’s job, it exercises financial control. This includes:
  • The extent of the worker's investment in the facilities or tools used in performing services
  • The extent to which the worker makes his or her services available to the relevant market
  • How the business pays the worker, and
  • The extent to which the worker can realize a profit or incur a loss
  1. Relationship. How the employer and worker perceive their relationship is also important for determining worker status. Key topics to think about include:
  • Written contracts describing the relationship the parties intended to create
  • Whether the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation or sick pay
  • The permanency of the relationship, and
  • The extent to which services performed by the worker are a key aspect of the regular business of the company
  • The extent to which the worker has unreimbursed business expenses

The Internal Revenue Service today reminded small business owners who work from a home office that there are two options for claiming the Home Office Deduction. The Home Office Deduction is often overlooked by small business owners.

As part of National Small Business Week (April 30-May 6), the IRS is highlighting a series of tips and resources available for small business owners.

Regular Method

The first option for calculating the Home Office Deduction is the Regular Method. This method requires computing the business use of the home by dividing the expenses of operating the home between personal and business use. Direct business expenses are fully deductible and the percentage of the home floor space used for business is assignable to indirect total expenses. Self-employed taxpayers file Form 1040, Schedule C , Profit or Loss From Business (Sole Proprietorship), and compute this deduction on Form 8829Expenses for Business Use of Your Home.

Simplified Method

The second option, the Simplified Method, reduces the paperwork and recordkeeping burden for small businesses. The simplified method has a prescribed rate of $5 a square foot for business use of the home. There is a maximum allowable deduction available based on up to 300 square feet. Choosing this option requires taxpayers to complete a short worksheet in the tax instructions and entering the result on the tax return. There is a special calculation for daycare providers. Self-employed individuals claim the home office deduction on Form 1040, Schedule C , Line 30; farmers claim it on Schedule F, Line 32 and eligible employees claim it on Schedule A, Line 21.

Regardless of the method used to compute the deduction, business expenses in excess of the gross income limitation are not deductible. Deductible expenses for business use of a home include the business portion of real estate taxes, mortgage interest, rent, casualty losses, utilities, insurance, depreciation, maintenance and repairs. In general, expenses for the parts of the home not used for business are not deductible.

Deductions for business storage are deductible when the dwelling unit is the sole fixed location of the business or for regular use of a residence for the provision of daycare services; exclusive use isn't required in these cases.

The Office of Management and Budget (OMB) released President Donald Trump’s proposed FY 2018 budget for the federal government on Tuesday. Included in the proposals are several tax items, including a proposal to authorize the IRS to regulate all paid tax return preparers.

The budget proposal calls for giving the IRS “statutory authority to increase its oversight of paid tax return preparers.” The proposal would be effective upon enactment. The OMB’s “Analytical Perspectives” on the budget says that this will decrease the “need for after-the-fact enforcement of tax laws and increase the amount of revenue that the IRS can collect.” It estimates that the proposal will increase revenue by $259 million in the years 2018–2027. An attempt by the IRS to regulate unenrolled tax return preparers was struck down by a federal court in 2013, on the grounds that the Service lacks statutory authority to impose rules on return preparers who are not practicing before the IRS (Loving, 742 F.3d 1013 (D.C. Cir. 2/11/14), aff’g 917 F. Supp. 2d 67 (D.D.C. 1/18/13)).

 

This year, early filers might see a slight delay in their tax refund. According to the IRS, the Protecting Americans from Tax Hikes (PATH) Act mandates the IRS hold refunds on tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC).

As a result, the IRS will start to release refunds on Feb. 15, 2017, which means the money won’t arrive in your bank account or on your debit card until the week of Feb. 27. Keep in mind that financial institutions do not process payments on weekends or holidays. The delay might be inconvenient, but it gives the IRS more time to detect and prevent tax fraud.

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