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10 Facts To Know Before Taking the Medical Expenses Deduction in 2014

Medical expenses fall among the list of IRS deductions. Before filing 2013 taxes, first learn if you qualify.

If you are generally healthy then you probably won’t be able to take a medical tax deduction. However, if you racked up countless medical and dental bills over the tax year, you might qualify for the medical expenses deduction.

Whether your deducting medical expenses or not, you can file your taxes on RapidTax. To help your filing process of claiming medical expenses on your 2013 tax return, here’s ten important facts;

1. You must Itemize: Don’t plan on deducting medical expenses if you’re taking the standard deduction. You can only claim a deduction for medical expenses if itemizing your deductions.
2. The AGI threshold has increased to 10%: In the past, if your list of medical expenses totaled a number exceeding 7.5% of your adjusted gross income (AGI), then you could deduct them. Starting on 2013 tax returns, that percentage has increased by 2.5%. Meaning, your total medical expenses must equal at least 10% of your AGI.
Continue reading “10 Facts To Know Before Taking the Medical Expenses Deduction in 2014”

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What Is The 2013 Child Tax Credit & Additional Child Tax Credit?

The 2014 tax season is here and you may be wondering what federal tax credits you’re eligible for on your 2013 taxes.

If your children are under 17, don’t forget to claim the 2013 child tax credit. The credit allows up to $1000 (per qualifying child), to be subtracted from the income tax you owe. If you are taking the 2013 child tax credit, you may be able to claim the additional child tax credit and receive a tax refund.

If you qualify for the child tax credit, you can claim it and avoid the hassle of extra paperwork (which often goes along with claiming it), by filing your taxes on RapidTax.

What is the Child Tax Credit and Who Qualifies?

The child tax credit is a federal tax credit up to $1000 per child, for individuals with a qualifying child (or children), under age 17. To receive the child tax credit, you must meet six requirements, provided by the IRS.  The requirements to claim the 2013 child tax credit are as follows;

  1. The credit may only be for a qualifying child.
  2. The child must have been 16 years old or younger at the end of 2013.
  3. You must provide at least half of the child’s support.
  4. You must claim the child as your dependent on your federal taxes.
  5. The child must be a U.S. citizen, U.S. national or U.S. resident alien.
  6. The child must have lived with you more than half of 2013.

What is the child tax credit phase out?

If you meet the requirements (listed above), the 2013 child  tax credit amount can be up to $1,000 per child. Don’t get too excited about the extra $1000, the total amount you can claim depends on your modified adjusted gross income, meaning there are income phaseouts.

To make life easier, RapidTax has created an income phase out chart to refer back to when filing your 2013 taxes. The charts below explain the income child tax credit phase outs (income levels above the stated, receive a smaller child tax credit) along with the child tax credit amounts, based on how many children you are claiming.

2013 Child Tax Credit

What is the additional child tax credit? Can I get a refund?

The additional child tax credit is any child tax credit amount which is refunded, due to the credit being excess to a person’s tax liability. Basically, if you want to take the child tax credit and realize you don’t have any tax due, you will instead tax the additional child tax credit (and receive a refund). The table below will help you understand the 2013 child tax credit you’ll receive this year.

2013 Additional Child Tax Credit

Filing your taxes and claiming the child tax credit doesn’t necessarily have to be a complicated process. Claiming the child tax credit 2013 is straightforward and simple when filing your taxes on RapidTax. Tax season 2014 is here, file today!

1/30/2014

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What Types of Donations are Tax Deductible?

If you made a charitable donation over the past year you may be wondering what you can write off on your taxes.

You may want to make a donation for the sake of the holiday season or to use it as a tax deduction (or both).  Keep in mind, only if you are itemizing your deductions while filing your taxes, you can write off charitable donations to those falling within “Qualified Organizations” list.

Charitable Contribution Deduction Facts:

  • You may deduct charitable contributions of money or property that you made to a qualified organization only if you itemize your deductions on Form 1040 .
  • Generally charitable deduction limits are up to 50% of your adjusted gross income
  • Contributions must be paid in cash or other forms of property before the end of the tax year in order to be deductible when itemizing your tax deductions
  • For items of property (items other than cash) donated, the fair market value of the item will be deducted on your tax return.
  • When making donations, it’s best to write checks (that way you can easily track your offerings)
  • The IRS  Publication 526 explains Charitable Contributions and tax deductible donations.

What Organizations are considered “Qualified Organizations” to donate to?

In order to consider a charitable contribution a tax deduction when itemizing your deductions it must be made to certain types of organizations. The list of qualified organizations is as follows: Continue reading “What Types of Donations are Tax Deductible?”