Income tax refund Archives - EricJohn Ltd | Tax and Accounting Services

February 18, 2017

Ramps, railings, doorways and the IRS: Medical write-offs

A home should fit its owner, and many homeowners spend considerable amounts modifying their dwellings to assist with health problems or disabilities.

Wheelchair ramps, wider doorways, lifts to second-story living spaces, grab bars in showers, shortened shelves and lowered cabinets. . . many home improvements can be deductible for federal tax purposes if they are made to accommodate medical conditions or disabilities. The write-offs are a bit more complicated than some other deductions in tax codes, but they also can be very beneficial.

Here’s the key qualifier for placing them on your 2016 tax return: all medical and dental expenses paid last year must amount to more than 10 percent of adjusted gross income. (There is one notable exception – the threshold falls to 7.5 percent of adjusted gross income for taxpayers and spouses who turned age 65 before Jan. 2, 2017.) The expenses being deducted also cannot have been reimbursed by health insurance or another source, the Internal Revenue Service says. In short, you must have paid them personally.

medical write-offs

Claiming medical deductions also will involve filing the full Form 1040. Medical expenses are itemized deductions, and taxpayers take them on Schedule A, which is part of the 1040. The shorter versions, which are Forms 1040 EZ and 1040A, don’t allow itemizing.
Spending for immediate medical treatments is an obvious type of medical deduction. But the IRS and federal tax codes also allow deductions for remodeling a dwelling or adding equipment to it for medical reasons. (Changes for other personal reasons such as appearance or architecture won’t work.)

Here are examples of some deductible costs:

Building wheelchair or walking ramps for entering/leaving your house. Leveling out the ground for home access also may qualify.
Installing railings or bars in bathrooms.
Modifying hardware on doors, such as replacing knobs with levers.
Relocating electrical outlets or fixtures.
Adding lifts to different floors in a house or changing stairs.
Widening hallways or doorways for wheelchair.
Lowering kitchen cabinets.
In some cases, moving rooms such as bathrooms, to another floor.
Ongoing maintenance of these medically necessary improvements also can qualify for the deduction.

medical tax deduction This deduction gets more complicated if the improvements add value to your home. If so, the taxpayer might only be able to deduct the cost above the increase to the value of the house.
For a deeper look into medical deductions, see IRS Publication 502. It also contains an alphabetical list of various eligible medical expenses and their limitations.

The circumstances for medical deductions are highly individual, of course. We at EricJohn Ltd. can help assess medical spending and make the proper filings for deductions on your tax return.

February 3, 2017February 15, 2017

Warning! Warning!

The Internal Revenue Service says it is especially worried about the spread of an email phishing scheme to schools, hospitals and nonprofit organizations. The federal tax agency today issued an “urgent alert” warning employers about the potential for identity theft from W-2 forms.

“This is one of the most dangerous email phishing scams we’ve seen in a long time” said IRS Commissioner John Koskinen. “It can result in the large-scale theft of sensitive data that criminals can use to commit various crimes, including filing fraudulent tax returns.”

Employees of those institutions – particularly those working in payroll or human resources departments – should be especially wary in dealing with requests for W-2 forms, the IRS announced.

The online thieves typically send an email to a worker in a payroll or HR department, asking for a list of employees and their W-2s. The main trickery involves email addresses. The thieves “spoof,” or disguise, the address to look like the email came from a company executive.

When the worker sends the list, the scammers get valuable information, such as Social Security numbers, wage data, residential names and addresses, etc., which can be used to file phony tax returns, open credit cards or steal in other ways,

The phishing ploys were around last year, too, but they occurred heavily in the corporate world. Now they’ve spread to school districts, hospitals, nonprofits, employment agencies and even tribal organizations, among others. This year, the online thieves not only are bilking a broader range of businesses, but they also are striking earlier in the tax reporting season, the IRS and a group of cooperating tax agencies and industry groups called the Security Summit warned.

Some scammers also have used a more sophisticated version. They’ve teamed up the phishing scam with a wire transfer of money, again supposedly requested by the organization’s executive. “Some companies have lost both employees’ W-2s and thousands of dollars due to wire transfers,” The IRS said in its alert.

Feel free to contact us at EricJohn Ltd. for more information about business and individual taxes.

February 12, 2016

“WHERE’S MY REFUND?”—THE IMPROVED VERSION!

Your income tax refund can never come too quickly, and the Internal Revenue Service and Minnesota Department of Revenue are fully aware.

Both tax collectors say an electronic path is the fastest for refunds. File your return online and then have them send the refund directly to a bank account. That way, you won’t have to wait for a check to be printed and mailed.

How much faster does the refund arrive? MN Revenue now says individual taxpayers can start checking for it about 72 hours – or once 3 days have passed – after filing a return online. Compare that with six weeks, which is the recommended wait time for a paper return. Those wait times don’t mean the refund will be delivered to the bank account yet, but they do allow tracking.

MN Revenue is touting improvements to its “Where’s My Refund?” service at its web site. Find it at www.revenue.state.mn.us/individuals/individ_income/pages/draft-wmr-context-page.aspx .

Its main feature is a big, blue button. Click that and you start tracking. You’ll need to enter your Social Security number, birth date and the refund requested on the tax return. (We should note that all this only works for returns filed in the last 12 months.)

The remake is designed to be simple. One feature, called “When Can I Expect My Refund?”,

shows the location of the return in the processing system. Once processing is completed, it reports the date the refund was sent.

The IRS also has a “Where’s My Refund.” See https://www.irs.gov/Refunds .It’s faster. You can begin tracking 24 hours after an electronic filing and four weeks after a paper return is mailed. But the IRS also says not to start inquiring about a refund for at least 21 days and six weeks respectively.

Like many tax preparers, we at EricJohn Ltd., are experienced in filing returns online and tracking them for your speedy refunds. Call us for more information!

April 30, 2015

LOOKING FOR YOUR REFUND?

Now comes the reward for those hours spent figuring out 1040s and calculating M1s!

Many Minnesota tax filers already might have their direct deposit refunds waiting in their bank accounts. At the same time, if they sent in their 2014 income tax returns close to the April 15 deadline, those refunded dollars might not have appeared yet, and that’s no reason to worry yet.

The Internal Revenue Service offers an online tracking system called “Where’s My Refund?” to check as soon as 24 hours after return hits its computers. Locate it online through http://www.irs.gov/Refunds. It allows taxpayers to follow the return through three stages: When it is received, when a refund is approved, and when the refund has been sent.

That’s helpful. But if the refund hasn’t arrived, it isn’t time to panic yet. The IRS tells taxpayers to wait for at least 21 days – or the end of the first full week in May – before starting to hunt for a “missing” refund from an electronically filed return. (In fact, IRS phone reps can’t even help you look within those first three weeks.) Nine out of 10 refunds are issued within 21 days, the agency assures.

Taxpayers who filed paper returns must wait six weeks before launching a search for a refund with the IRS.

Minnesota also offers a refund tracker online for its taxpayers, and it also is named “Where’s My Refund?” With a few identifying details, Minnesota’s Department of Revenue will tell taxpayers the status of a refund from an income tax return filed within the last 12 months. Find that service at https://www.mndor.state.mn.us/tp/refund/_/.

Minnesota’s tracking service also includes state property tax refunds. This year, taxpayers who filed paper returns for property tax refunds may not be able to track them until after July 1, Minnesota Revenue says.

If you’re not in a hurry to claim your refunds, here’s when the clock expires. Minnesota law says a refund can be requested within 3½ years from the normal filing deadline (usually April 15) or from an extended deadline.

EricJohn Ltd. can advise taxpayer on income tax and their refunds. As an enrolled agent, owner Eric Buechler also represents taxpayers directly in tax matters before the IRS.