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FAQ

Questions:

What do I do if I receive a notice from the IRS about my taxes?

Is it necessary to file a tax return for a single-member LLC (SMLLC) formed to acquire and hold some rental property?

Should I bother keeping track of medical expenses?

What does Obamacare mean for me?

What is the standard mileage rate for business driving?




Answers:

What do I do if I receive a notice from the IRS about my taxes?

Don’t panic! the first thing to do is carefully read the notice—to determine why it was sent, what the IRS is requesting, and what they want you to do. It may be nothing of importance; it may even be a notice in your favor. After reading it you should bring it to our attention.

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Is it necessary to file a tax return for a single-member LLC (SMLLC) formed to acquire and hold some rental property?

While a SMLLC is a separate legal entity, it is "disregarded" for income tax purposes and no separate filing is needed.

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Should I bother keeping track of medical expenses?

Yes! While medical-related expenditures must exceed 10% of federal adjusted gross income (AGI) to be deductible (or 7.5% for those aged 65 or older), Arizona taxpayers can deduct 100% of these expenses on their state income tax return.

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What does Obamacare mean for me?

Obamacare, also known as the Affordable Care Act, is a health reform that comes with many changes. A few of the most notable changes are: "[Starting in 2014] Individuals without insurance owe a tax. [...] Folks must have qualifying coverage for themselves and their dependents to avoid the tax. This includes, for example, health coverage provided by an employer that meets minimum federal requirements, coverage purchased through an exchange and federal coverage such as Medicare, Medicaid, Tricare and veterans coverage. Individuals for whom coverage is too expensive are exempt from the tax. Employees whose share of premiums exceeds 8% of the household's AGI won't be hit. Ditto for people ineligible for employer coverage if the cost of a basic bronze-level plan in an exchange, less any tax credit for buying insurance, exceeds 8% of household AGI. The tax for being uninsured is normally the HIGHER of two amounts: 1) The basic penalty: $95 per person (or $47.50 for each family member under 18), with a ceiling of $285. OR 2) The income-based penalty: 1% of the excess of the taxpayer's household AGI over $10,150 for singles or $20,300 for couples. The tax is lowered proportionately for any months the taxpayer had coverage. [However] the levies will be higher in 2015 and 2016. The IRS has limited remedies to collect this tax. It cannot use liens or levies, so it can only offset tax refunds. Nor can it charge interest on the unpaid balance." {The Kiplinger Tax Letter, edition published Dec 2014}

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What is the standard mileage rate for business driving?

The standard mileage rate declined for the 2014 tax year to 56 cents per mile for business driving.

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