Notify your tax preparer if you purchase health insurance through the SHOP Marketplace!

MO Healthcare ExchangeIf you are an employer who has purchased their employee’s health insurance through the “Healthcare Exchange” or the “Small Business Health Options Programs (SHOP) Marketplace”, don’t forget to alert your tax preparer.

Beginning in the 2014 tax year, a new form (Form 1095-A) will be required for you, as will a few changes to your standard Form 1040.

You should also prepare for a delay in the preparation of your tax return, as there is an expected delay in the receipt of the Form 1095-A.

If you have any questions or concerns about the ACA, please call our office at 314-993-4285 or e-mail us at office@hkaglobal.com.

Important change to the small business health insurance tax credit!

IMO Healthcare Changesn accordance with changes to the healthcare law, the Affordable Care Act (ACA), beginning with the 2014 tax year small business employers will be unable to take a credit for employee’s health insurance unless the policies were purchased through the Small Business Health Options Programs (SHOP) Marketplace. However, if employers do purchase their employee’s health insurance through SHOP, the credit has increased from the previous amount of 35% up to a maximum of 50% of premiums paid.

If you have any questions or concerns about the ACA, please call our office at 314-993-4285 or e-mail us at office@hkaglobal.com.

AMT Alert!

UCCC LogoAttention: If you pay the alternative minimum tax, or AMT, you are not getting a tax deduction for the taxes you pay to the state of Missouri!

We have partnered with the University City Children’s Center to change this for you!

By making a donation to the UCCC, you will get many benefits:
– You will be supporting an excellent charity and helping today’s youth.
– You will earn a 50% Missouri tax credit.
– Your effective tax rate will be reduced.
– The IRS will recognize your Missouri estimate payment as deductible.
– The state of Missouri will give you a deduction as a charitable contribution.

If you are interested in learning more about how you could receive the benefits of a donation to the University City Children’s Center, please call our office at 314-993-4285.

For more information on the University City Children’s Center, please go to their website at www.uccc.org

Important Change to Tax Credit Allotments.

Tax_Credits_1On September 10th, the Missouri Legislature overrode the veto by the Governor and passed a bill which increases the cap on tax credits for contributions made to maternity homes, pregnancy resource centers, and local food pantries.

To read more about this bill, please go to the Missouri House of Representatives website.

If you would like to learn how this bill could affect you, please call our office at 314-993-4285.

Nine Tips on Deducting Charitable Contributions

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Giving to charity may make you feel good and help you lower your tax bill. The IRS offers these nine tips to help ensure your contributions pay off on your tax return.

1. If you want a tax deduction, you must donate to a qualified charitable organization. You cannot deduct contributions you make to either an individual, a political organization or a political candidate

2. You must file Form 1040 and itemize your deductions on Schedule A. If your total deduction for all noncash contributions for the year is more than $500, you must also file Form 8283, Noncash Charitable Contributions, with your tax return.

3. If you receive a benefit of some kind in return for your contribution, you can only deduct the amount that exceeds the fair market value of the benefit you received. Examples of benefits you may receive in return for your contribution include merchandise, tickets to an event or other goods and services.

4. Donations of stock or other non-cash property are usually valued at fair market value. Used clothing and household items generally must be in good condition to be deductible. Special rules apply to vehicle donations.

5. Fair market value is generally the price at which someone can sell the property.

6. You must have a written record about your donation in order to deduct any cash gift, regardless of the amount. Cash contributions include those made by check or other monetary methods. That written record can be a written statement from the organization, a bank record or a payroll deduction record that substantiates your donation. That documentation should include the name of the organization, the date and amount of the contribution. A telephone bill meets this requirement for text donations if it shows this same information.

7. To claim a deduction for gifts of cash or property worth $250 or more, you must have a written statement from the qualified organization. The statement must show the amount of the cash or a description of any property given. It must also state whether the organization provided any goods or services in exchange for the gift.

8. You may use the same document to meet the requirement for a written statement for cash gifts and the requirement for a written acknowledgement for contributions of $250 or more.

9. If you donate one item or a group of similar items that are valued at more than $5,000, you must also complete Section B of Form 8283. This section generally requires an appraisal by a qualified appraiser

Top Six Tax Tips for the Self-Employed

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When you are self-employed, it typically means you work for yourself, as an independent contractor, or own your own business. Here are six key points the IRS would like you to know about self-employment and self-employment taxes:

1. Self-employment income can include pay that you receive for part-time work you do out of your home. This could include income you earn in addition to your regular job.

2. Self-employed individuals file a Schedule C, Profit or Loss from Business, or Schedule C-EZ, Net Profit from Business, with their Form 1040.

3. If you are self-employed, you generally have to pay self-employment tax as well as income tax. Self-employment tax includes Social Security and Medicare taxes. You figure this tax using Schedule SE, Self-Employment Tax.

4. If you are self-employed you may have to make estimated tax payments. People typically make estimated tax payments to pay taxes on income that is not subject to withholding. If you do not make estimated tax payments, you may have to pay a penalty when you file your income tax return. The underpayment of estimated tax penalty applies if you do not pay enough taxes during the year.

5. When you file your tax return, you can deduct some business expenses for the costs you paid to run your trade or business. You can deduct most business expenses in full, but some costs must be ‘capitalized.’ This means you can deduct a portion of the expense each year over a period of years.

6. You may deduct only the costs that are both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry. A necessary expense is one that is helpful and appropriate for your trade or business.

Charity Benefits People and Your Wallet- Youth Opportunity Tax Credits

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The season of giving not only provides benefits to the receivers, but also for people who give this year.

The state of Missouri has recently introduced Youth Opportunity Program Tax Credits. YOPs are designed for programs that broaden and strengthen opportunities for positive development and participation in community life for youth.  Fund raising through the YOP eligible gifts will directly support low-income families.

So, for those of you who are unaware of what a tax credit is we thought it might be a benefit to explain.  A tax credit is actually different from a tax deduction, which works by lowering taxable income, tax credits are a direct reduction of your taxes due.  With tax credits, you have a chance to reduce the amount you owe to the state.

Tax credits are Youth Opportunity Tax Credits are a 50% dollar for dollar deduction from your Missouri State Income Tax. Whether it be individual, business, insurance or banking income.  That means that whatever you give to the charitable institutional, 50% of your contribution comes off of what you owe the state in taxes.

For instance, if you contribute $10,000 to a charity eligible for the YOP tax credit, $5000 of it will be saved in Missouri State Taxes. Even better, this tax credit is in addition to your Federal Tax Deduction.

There are over 60 youth-based organizations in the state of Missouri who participate in the Youth Opportunity Program.  To view a list of these organizations and find out how you can participate, please click here.

For more information on how the YOP tax credit can benefit you and your wallet, please contact Hauk Kruse & Associates for more information at 314-993-4285 or click here to visit our website.