Can you Deduct Medical Home Improvements?

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips Can you deduct a medical home improvement? Are you planning to make substantial home improvements in the coming year? Normally, you can't deduct home improvement expenses on your personal tax return. However, you may be able to deduct the costs of medical improvements to your home. It may be worth doing, but first there are several tax law obstacles to overcome. Potential roadblocks Under current law, you may only deduct medical expenses in excess of 10 percent of your adjusted gross income (AGI). If you don't clear that 10 percent for the year, you get no deduction. This is a high bar for many taxpayers. To determine if you qualify for a deduction, add up the unreimbursed medical expenses that satisfy the tax law requirements. An expense counts toward the 10 percent only if it's for medical care for you, your spouse or your dependent. Conversely, an expense that is just beneficial to your general health rather than a specific health issue, or one that's done for personal motives (e.g., architectural taste) isn't deductible. When a homeowner makes an improvement for medical reasons, the deductible amount is limited to the cost above the increase in the home's value. For instance, if a $10,000 improvement increases the value of your home by $4,000, $6,000 counts to the deduction. Improvements made by tenants are fully deductible, as they don't benefit from the increase in the home's value. What sort of home improvements qualify? An allergist may recommend installing central air conditioning or a swimming pool to alleviate a child's asthma. Or, you might build an elevator or bathroom on a lower floor to benefit someone with a heart condition. Other improvements could include (but aren't limited to): Making doorways larger Adding entrance or exit ramps Installing railings Modifying electrical outlets and warning systems Don't leave matters to chance. If you qualify for a deduction, obtain a written statement from a physician prescribing the improvement, and an independent appraisal of the increase in the home's value. Please call us if you have any questions. 2016 Tax Extension Deadlines are approaching. Go to www.tenfortyplus.com and complete your online organizer (under forms and documents). Make your appointment using our online appointment system. Call 281-397-7777 and get a user id with password set up so you can send us all your information through our online secure portal and do your taxes from the comfort of your home or office or come see us at our office. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker EA www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000.

ABCs of Business Education Deductions

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips The ABCs of business education deductions Now that the kids are back in school, you may have the itch to return to the classroom yourself, perhaps to brush up on certain skills in your field or expand your horizons. Can you deduct the cost of business education? It depends. Generally, you can deduct business expenses only if one of these two requirements is met: The education is required by your employer or is mandated by law. The education maintains or improves the skills needed in your present work. A couple caveats That sounds simple enough, but there are also a couple things that can disqualify you for the deduction. First, if the education is required to meet the minimum educational requirements of your trade or business, then you are expected to pay that cost as a normal part of doing business — and without a tax break. Second, if the education qualifies you for an entirely new trade or business, then you also don't get to use the deduction. It's the second caveat that often trips up taxpayers. For instance, if a nurse starts taking courses that will result in a degree as a physician, the courts have said that the education expenses can't be deducted because it qualifies the nurse for a new line of work. If you qualify for the deductions Assuming you do qualify, you may deduct expenses like tuition, books, laboratory fees, equipment and transportation between work and school. Typically, the cost of the trip is deductible if you go straight to class after work. You can't write off travel costs if you stop at home for a snack or to change into more comfortable clothes, however. When you pay business education costs out your own pocket, the expenses are deductible as miscellaneous expenses, subject to a floor of 2 percent of adjusted gross income (AGI). However, if your company reimburses you, payments are generally deductible in full by the company and tax-free to you. Alternatively, an employer may establish an educational assistance plan (EAP) that provides up to $5,250 in annual tax-free benefits to each participant. Please call us if you have any questions. 2016 Tax Extension Deadlines are approaching. Go to www.tenfortyplus.com and complete your online organizer (under forms and documents). Make your appointment using our online appointment system. Call 281-397-7777 and get a user id with password set up so you can send us all your information through our online secure portal and do your taxes from the comfort of your home or office or come see us at our office. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker EA www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000. • Sale or purchase of a residence or other real estate.

Fraudulent Tax Returns

Ten Forty Plus Quality Tax Preparation & Financial Services #2 Inc 5625 Cypress Creek Parkway Ste 321, • Houston, TX 77069 Phone: (281) 397-7777 • Phone: (281) 397-3535 joeb@tenfortyplus.com • www.tenfortyplus.com What did thieves try to steal? Along with tax season comes the season of tax identification theft. Those who have become victims know how frustrating the experience can be. The frustration Until now, if you were a victim of tax identity theft, you would be unable to receive information from the IRS about the depth of the fraud. Many frustrated taxpayers have tried to get copies of the fraudulently filed tax returns. The IRS has repeatedly refused freedom of information requests to get these copies. What’s new? In a recent announcement, the IRS has changed course on requests to get copies of fraudulently filed tax returns. As long as you follow their instructions, you are now able to get copies of what thieves attempted to do with your tax information. But be forewarned. The IRS may black out information on the requested return that does not pertain to you. They will try to present you with enough of the falsely filed tax return to allow you to determine the depth of the data that has been stolen. Why the theft information may be important You can see what personal information the thieves have. What has been compromised? Name, address, and Social Security Number? Do they have your dependent’s or spouse's information? Perhaps they also have your income and withholding data. Knowing this will help you plan the extent of data protection you will need. There may be clues as to where the identity theft occurred. Of the information stolen, who had access to it? Did the data breach of your identity happen through the IRS or somewhere else? There may be more tax years impacted than you thought. Request information from the year you first became aware of the identity theft at the IRS. But you may wish to request information in a prior year and in the year following the theft. The IRS has access to up to six years of tax returns. Try to determine whether the theft is ongoing is a one-time occurrence. The request requires specific information. Here is a link to the IRS announcement: Instructions for Requesting Copy of Fraudulent Returns Thankfully, the IRS’ recent decision to share this fraudulent information is allowing victims to take some action to protect themselves. Questions about your financial situation? Contact Ten Forty Plus Quality Tax Preparation & Financial Sign up for informative emails Joseph C Becker EA Licensed to Practice before the IRS Ten Forty Plus Quality Tax Preparation & Financial Small Business & Individual Experts 5625 Cypress Creek Parkway Ste 321, • Houston, TX 77069 Phone: (281) 397-7777 • Phone: (281) 397-3535 joeb@tenfortyplus.com • www.tenfortyplus.com

Get more mileage from your business car

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips Get more tax mileage from your business car Now that 2018 models are in the showrooms, you may be shopping for a new car for your business. Be aware that you can use one of two methods, the actual expense method or the standard mileage rate, to deduct business auto expenses (other special rules apply to leased car deductions). Although the actual expense method is more work, it could provide a bigger deduction. Here's a quick recap: Actual expense method: This encompasses all your expenses: oil, gas, repairs, insurance, tires, registration fees and licenses, as well as a generous Section 179 and/or depreciation allowance. Keep in mind that there a special rules limiting annual write-offs for cars deemed "luxury cars" by the IRS. The deduction is based on your percentage of business use. Standard mileage rate method: Alternatively, you can use the IRS-approved standard rate, which is 53.5 cents per business mile in 2017 and adjusted annually. You can also tack on the cost of business-related tolls and parking fees to the standard rate. Both methods require detailed recordkeeping for business trips, but the standard mileage rate can be less of a hassle because you don't have to keep track of every expense. Nevertheless, the extra work may be worthwhile. In particular, you may benefit from a Section 179 and/or depreciation allowance, including 50 percent "bonus depreciation," in the first year of ownership if you use the actual expense method. With the standard mileage rate, the cost of depreciation is accounted for in the annual rate prescribed by the IRS. Which mileage rate is best for you depends on your situation. We can help you do the math to find the best tax result. Please call us if you have any questions. 2016 Tax Extension Deadlines are approaching. Go to www.tenfortyplus.com and complete your online organizer (under forms and documents). Make your appointment using our online appointment system. Call 281-397-7777 and get a user id with password set up so you can send us all your information through our online secure portal and do your taxes from the comfort of your home or office or come see us at our office. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker EA www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000. • Sale or purchase of a residence or other real estate.

Municiple Bonds

Ten Forty + Quality Tax Preparation & Financial Services 281-397-7777 Fax 281-397-7443 Tax Tips Four tax incentives of municipal bonds In today's tax environment, nothing is certain. However, as things stand now, high-income taxpayers may continue to value municipal bonds ("munis") and muni bond funds. Just consider these four tax incentives. Interest income from munis is exempt from federal income tax. This is a major benefit to taxpayers in the top tax brackets, especially when compared to taxable investments. For example, to someone in the top 39.6 percent tax bracket, a AAA-rated muni earning 4 percent is preferable to a taxable corporate bond earning 5 percent. Interest income from munis is exempt from state income tax if issued by a municipality or other authority within your state. This is a significant "double tax break" for residents of high-tax states. Interest income from munis doesn't count toward your adjusted gross income (AGI) for tax return purposes. This could increase certain tax benefits, such as deductions for medical expenses or charitable gifts, or avoid cutbacks. Interest income from munis doesn't count in the tax calculation of the net investment income tax (NII). Currently, a 3.8 percent surcharge applies to the lower amount of your NII (which includes most investment income items) or modified adjusted gross income (MAGI) above $200,000 for single filers and $250,000 for joint filers. While these tax incentives exist, this should not lead you to believe munis are completely tax-free. For example, if you buy certain munis, called "private activity bonds," it may create alternative minimum tax (AMT) complications. You will owe capital gains tax when you sell munis at a profit. Also, remember that there's more to investing than just taxes. Take all the relevant financial factors into account, including the suitability of munis in your portfolio. The rules related to munis are complex and can change. Please call us if you have any questions. 2016 Tax Extension Deadlines are approaching. Go to www.tenfortyplus.com and complete your online organizer (under forms and documents). Make your appointment using our online appointment system. Call 281-397-7777 and get a user id with password set up so you can send us all your information through our online secure portal and do your taxes from the comfort of your home or office or come see us at our office. 1040 + Quality Tax Preparation & Financial Services Joseph C Becker EA www.tenfortyplus.com 281-397-7777, Fax 281-397-7443 joeb@tenfortyplus.com Contact Us There are many events that occur during the year that can affect your tax situation. Preparation of your tax return involves summarizing transactions and events that occurred during the prior year. In most situations, treatment is firmly established at the time the transaction occurs. However, negative tax effects can be avoided by proper planning. Please contact us in advance if you have questions about the tax effects of a transaction or event, including the following: • Pension or IRA distributions. • Retirement. • Significant change in income or • Notice from IRS or other deductions. Revenue department. • Job change. • Divorce or separation. • Marriage. • Self-employment. • Attainment of age 59½ or 70½. • Charitable contributions • Sale or purchase of a business property in excess of $5,000.