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FEATURED CONTENT
Avoiding the Repayment Cliff: Mitigating the Effects of Miscalculating the Advance Premium Tax Credit
The premium tax credit (PTC) is a refundable credit that is available to certain individuals “whose household income for the taxable year equals or exceeds 100%, but does not exceed 400% of an amount equal to the poverty line for a family of the size involved.” In other words, it’s a refundable tax credit that specifically subsidizes the cost of insurance purchased on a health care marketplace for individuals who are over the federal poverty level (FPL), but not by 400 percent or more. This credit is available as an advance paid directly to the marketplace for qualifying taxpayers who cannot afford (or do not wish) to pay their full monthly premium out of pocket. The amount of the credit is calculated based on estimated annual household income. When taxpayers receive more advance credit than they are entitled to, they must repay the excess. So, the consequences for an intentional or inadvertent underestimation of annual income can be severe. What follows is an overview of how the credit works and describes strategies for reducing the amount of advance premium tax credit (APTC) the taxpayer must repay both immediately and after the fact.
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CURRENT EDITION
Editor’s Pick: The Future of Digital Product Taxation—What Tax Professionals Need to Know
As states increasingly focus on taxing digital products, tax professionals need to be aware of how these changes will affect their clients and businesses. The Multistate Tax Commission (MTC) is at the forefront of efforts to create more uniform approaches to taxing digital goods, and their proposals could have far-reaching consequences for compliance, pricing strategies, and audit risks. Here’s a breakdown of the major proposals under consideration and how they will impact sellers of digital products—and the tax professionals advising them.
Striking a Balance: Pitching to the Umpires of Tax Law – Understanding US Tax Court Judges through the Art of Baseball Analogies
In this fascinatingly original article, we explore the striking parallels between America’s pastime and the high-stakes world of tax litigation. Prepare to be surprised as we reveal the hidden connections between the umpires of the diamond and the judges of the Tax Court. From the precise strike zones of regular judges to the veteran expertise of senior judges, and the specialized skills of special trial judges, you’ll gain a newfound appreciation for the officials who keep the game of tax law fair and balanced.
Dodging the IRS Penalty Flag: Avoiding the Accuracy-Related Penalty
A penalty specifically for taxpayers who have made a mistake on their return. That’s how I explain the accuracy related penalty to taxpayers. This penalty carries a punch as well, with 20% of the tax the IRS didn’t receive due to the taxpayer making a mistake. This seems harsh out of context. The reason for this harshness is because the IRS considers these “mistakes” to be intentional due to taxpayer negligence. This is one of the reasons at my firm that we encourage our clients to take their time when filling out the intake form and gathering their documents. Omitting an income document can be costly in the end to both you and your client. The IRS will hit your client with penalties that they could have avoided, and you may compromise the integrity of your firm.
SIMPLIFIED TAX STRATEGIES &
PRACTICAL IMPLEMENTATION
Think Outside the Tax Box provides tax reduction strategies along with practical
implementation advice in order to reduce your clients’ federal tax bill with ease.
