financial planning
financial planning

Tips and Tricks for Tax Season 2015

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The dawn of a new year brings a fresh opportunity to help clients make tax-optimized decisions. There are a multitude of tips and tricks for each area of your practice. This installment of tips and tricks will focus on important administrative tips for tax season.

Free Tax Transcripts

Rather than pay $50 per return to request a copy from the IRS by using Form 450: Request for Copy of Tax Return, request a Tax Return Transcript free of charge using Form 4506-T. Go to and click “Get a Tax Transcript” to utilize the automated self-help service. You can also call 800-908-9946.

Electronic Fund Transfer The fastest way for a client to receive their refund is to combine e-file with Direct Deposit. About eight in 10 taxpayers use direct deposit. This is likely because the IRS issues nine out of 10 refunds in less than 21 days. If money is to flow the other direction because your clients owe taxes, the best way make the payment is with IRS Direct Pay. This free service can transfer money using the client’s checking/savings account, debit/credit card or Electronic Funds Withdrawal. Refer to the “Payments” tab at for further guidance on transferring money electronically. Late Payment

If a client owes money to the IRS and cannot make the entire payment, they should pay as much as possible to reduce interest and penalties for late payments. They may file Form 9465: Installment Agreement Request, with their tax return requesting to pay in installments. They may also use the Online Payment Agreement tool to request more time to pay. You may file this for them if you have power of attorney.

Exemptions to Minimum Essential Coverage under the Affordable Care Act Provisions of the Affordable Care Act can cost clients in the form of additional taxes and penalties without the “minimum essential coverage.” The fee increases each year until it is near the price of the cheapest available health plan.

One such provision is the Individual Shared Responsibility Provision. In 2015, the fee is $325 for an uninsured adult and $162.50 for an uninsured child (up to $975 for a family), or 2 percent of the person’s taxable income – whichever is greater. In 2016, the fee is $695 per adult and $347.50 per child (up to $2,085 for a family), or 2.5 percent of household income above the tax return filing threshold for filing status – whichever is greater. Your client may pay 1/12 of the total fee for each full month in which a family member went without coverage or an exemption. See Individual mandate for more details on the fee.

The IRS cannot enforce the Individual Shared Responsibility Provision with liens or the typical methods of IRS collections. The only way for the IRS to collect an unpaid fee for not having health insurance is to withhold it from a possible refund after the tax return is filed.

The easiest way to qualify for an exemption is to go to HealthCare.Gov and sign up for a marketplace account, which automatically determines if a client qualifies for exemptions. One such exemption is the hardship exemption, which can be used to enroll in the catastrophic plan. The catastrophe plan features lower premiums, if obtained.

Applying for an exemption should not be left to the last minute. In many cases, a form will need to be filed and then waited on for confirmation, in order to report the exemption. In addition, many exemptions require specific documentation to verify eligibility. Obtaining the necessary documentation also takes time. Waiting can mean a delay of any refund.

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