additional tax on health savings accounts. You must also file
if you have household employment taxes. However, if you only have household
employment taxes and nothing else, then just file Schedule H by itself. You
must also file if you have any type of recapture taxes.
Any special circumstances aside from plain Form W-2 wages
usually obligate you to file. For instance, if you received Archer MSA,
Medicare Advantage MSA, or health savings account distributions. If you had
earning from self employment of at least $400 then you are liable for social
security taxes and must file to pay your fair share. If you worked for a
church or any qualified church-controlled organization and you had wages
from these of at least $108.28 then for sure you will be obligated to file a
tax return. More recent legislation, if advance payments of the premium tax
were made to you or your spouse or dependents as a result of being enrolled
through the Health Insurance Marketplace, you must file a tax return. If you
had any of these advanced payments you will see them on Form 1095-A from
such organization.
As a new tax preparer you must remember that the most
important thing in taxation is keeping good records. Any calculations you
make to issue credits and deductions must be documented in some form of
worksheet. The Internal Revenue Service and state agencies already have many
worksheets in place to help you accomplish this. You should incorporate all
worksheets and as many worksheets as possible into your your interview
packet. By using these worksheets, either the Internal Revenue Service and
state worksheets or your own worksheets that request the same information,
you are avoiding trouble and creating a paper trail that will help you and
your client in case of an audit. These worksheets will help you keep out of
trouble in case there is fraud or wrongdoing on behalf of the client.
There the cost of keep up a home worksheet for example, where
you list all expenses associated with the upkeep of your home. This
worksheet will help you determine if you have paid more than the expenses of
keeping up a home for a parent or your dependent children. It is usually
useful when you are trying to determine if the individual is head of
household for purposes of the head of household filing status. Items
that are taken into consideration in this worksheet are property taxes,
mortgage interest, rent, utilities, repairs, property insurance, food
consumed and other household expenses. Once you add up all the expenses and
take into account what you have paid and what others have paid, then you
determine if you paid more than 50% of the upkeep or not. If the total
amount you paid is more than the amount others paid, you have met the
requirement of paying more than half the cost of keeping up the home.
There are other requirements to determine head of household
qualifications. For example, you must determine who is a qualifying person
that would qualify you to file as head of household. If the person if your
qualifying child and he or she is single, then that person is a qualifying
person. It does not matter if you claim an exemption for him or her or not.
A qualifying child can be a son, daughter, grandchild who lived with you
more than half the year and also has to meet other tests. If this qualifying
child is married and you can claim an exemption for him or her, then this
person would also be a qualifying person. However, if you cannot claim an
exemption for him or her, then you cannot consider him or her a qualifying
person for the exemption and head of household filing status.
