206 Pettit Avenue Bellmore, NY 11710

Monday, July 27, 2015

Tips for Renting Your Vacation Home This Summer

Tips for Renting Your Vacation Home This Summer

One of the ways to defray the costs of owning and maintaining a vacation home, is to rent it out when you are not using it.  Income earned from those rentals may be reportable on your income tax return. For income tax purposes, a vacation home may include a house, apartment, condo, mobile home, boat, or similar property.  In order to be considered a “home”, the vacation property must have basic living accommodations, such as sleeping space, a toilet, and cooking facilities.  Read on for some helpful tips.

  1. Income and expenses related to renting a vacation home are reported on Schedule E of your personal income tax return.
  2. As long as you (or your family) also use the home, your rental expenses cannot exceed the rent you receive (meaning you cannot claim a loss.)
  3. Special rules must be followed when you rent out a home that you also use personally.  Expenses must be allocated based on the number of days the unit is rented or available for rent, and the number of days it is used by you and your family.  Any expenses that cannot be deducted on Schedule E, may be deducted on Schedule A.
  4. If you you rent a vacation home for less than 15 days a year, you are not required to report the rental income on your tax return.  In this case, any mortgage interest or real estate taxes for the home would be deducted on Schedule A.

By: Honorine M. Campisi, Senior Tax Manager

Tuesday, July 14, 2015

Are You Feeling Lucky This Summer?

Are You Feeling Lucky This Summer?

Do your summer plans include testing your luck at the racetrack or casino?  Did you realize that gambling winnings are taxable income?  Don’t let that dampen your fun.  Read on for helpful tax tips and good luck!

1.       Winnings can include winnings from raffles, lottery, casinos or horse races. 

2.       You may or may not receive a Form W-2G from the payer.  Information on that form is also   reported  to the IRS.  If you do not receive this form, you are still  required to report your winnings, so you  must maintain good records of your winnings. 

3.       If you itemize your deductions, you can partially offset some of your winnings.  Gambling losses can be deducted up to the amount of gambling income   reported on your tax return.  Unfortunately, if you claim the standard deduction, you do not get to benefit from your losses!

4.       Make tax time easier by keeping a folder with win and loss receipts, statements or tickets.

 By: Honorine M. Campisi, Senior Tax Manager

Tuesday, June 30, 2015

The Dependent Care Credit and Summer Camp

The Dependent Care Credit and Summer Camp

Did you know that costs for summer camp may qualify for a tax break via the Child and Dependent Care Credit?!  This credit is available for parents who pay for child care so that they can work or look for work.  Read on for great tips!

1. Filing status counts – if you are married, you must file jointly to get the credit.  You are not eligible if you are married and file separately.  There are exceptions if you are legally separated or live apart from your spouse.

2. Camp costs must be for your dependent child / children, who are under age 13 at time of care.

3. Camp costs must be incurred so that you and your spouse can work or look for work.  One spouse can be treated as working for any month that they are a full time student.

4. You and your spouse must each have earned income from wages, salaries, tips or self-employment net earnings.

5. You will need the name, address and taxpayer identification number of the camp provider.  You should save your receipts and records to make it easier to claim the credit on your tax return.

6. The amount of the tax credit is between 20% - 35% of your allowable expenses.  Your applicable percentage is based on your income.

7. There is a limit on allowable expenses of $3,000 for one qualifying child and $6,000 for two or more qualifying children.

8. The following costs do not qualify for the credit: costs for overnight camps or summer school tutoring costs, care provided by a spouse or your child who is under age 19, or care given by a person you can claim as your dependent.

9. If you or your spouse receives dependent care benefits from an employer, the amount of your allowable expenses will be reduced.

By: Honorine M. Campisi, Senior Tax Manager

Tuesday, June 2, 2015

Marriage Impacts Your Finances

Find some time to discuss these topics before walking down the aisle.

1. Combine it all, keep it separate, or a little of both; consider what strategy will work best for the both of you when setting up your bank accounts.

2. A little mystery keeps things interesting – but not when it comes to your future spouse’s financial investments!  We live in an electronic world, where many of us keep our investments online with no paper trail.  Will your spouse know how to access all your accounts if something happens to you?  Many brokers no longer mail necessary tax forms and require them to be printed from their websites – make sure you both know how to gain access.

3. Know what financial baggage each of you brings to the relationship.  Do you have a huge debt to pay off, have you filed for bankruptcy, and are you up to date on required tax filings?

4. Evaluate your health – insurance, that is.  Will you combine coverage to save money, or keep separate policies?  If you have coverage through the Health marketplace, you’ll need to re-evaluate your coverage.  Consider getting new quotes for car, home or renter’s insurance, and an umbrella policy if you own a home.

5. Ask your tax advisor about adjusting your tax withholding.  Your tax situation changes once you’re married and could result in a bigger (or smaller) tax bill.  Plan ahead to make sure you know what to expect to avoid an unwelcome surprise at tax time.

6. Evaluate and maximize your retirement strategies.  Your marriage and the resulting combined income may impact your ability to continue making IRA contributions.

7. Draft your wills!  This is at the top of the list of must do’s, but understandably gets put off since no one likes to think about death.   

By: Honorine M. Campisi, Senior Tax Manager

Monday, May 18, 2015

Tax Benefits for Members of the Military

May is National Military Appreciation Month!

The IRS wants you to know about the many tax benefits available to members of the military and their families.

  1. The Voluntary Income Tax Assistance (VITA) program partners with the military to provide free tax preparation to service members and their families at bases in the USA and around the world.
  2.  If a service member prepares their own return the IRS provides free electronic filing using the IRS Free File program.
  3. Combat pay is partly or fully tax free.
  4. Service members stationed abroad have until June 15th to file their federal income tax return.  Those serving in a combat zone have even longer to file their returns.  They have until 180 days after they leave the combat zone to file.
  5. Eligible unreimbursed moving expenses are deductible.
  6. Reservists whose duties take them more than 100 miles from home can deduct their unreimbursed travel expenses even if they don’t itemize their deductions.
  7. Low and moderate income service members often qualify for additional tax benefits such the Earned Income Tax Credit.
  8.  Low and moderate income service members who contribute to an IRA can often claim the retirement savings contributions credit. 

Feel free to call our office to find out more information!

By: Chris Murphy, Senior Accounting Manager