FAQ

Frequently asked Questions –

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1 .FBAR

Who Must File an FBAR?
United States persons are required to file an FBAR (Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts if:
1. The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
2. The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported.

United States person

United States Person means United States citizens; United States residents; entities, including but not limited to, corporations, partnerships, or limited liability companies created or organized in the United States or under the laws of the United States; and trusts or estates formed under the laws of the United States.

Use this link to Report FBAR ONLINE
http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html


 

2. IRS Penalties:-

  • There is no penalty if you’re getting a tax refund, provided you file within 3 years of the April 18 deadline (or October 15 deadline if you filed an extension).
    • After 3 years, unclaimed tax refunds are forfeited and become the property of the U.S. Treasury.
  • There is no penalty if you filed an extension and paid any additional taxes owed by April 18, as long as you file your return by the October 15 deadline.
    • late filing penalty applies if you owe taxes and didn’t file your return or extension by April 18.
    • This penalty also applies if you owe taxes, filed an extension, but didn’t file your return by October 15.
    • The late filing penalty is 5% of the additional taxes owed amount for every month (or fraction thereof) your return is late, up to a maximum of 25%.
    • If you file more than 60 days after the due date, the minimum penalty is $135 or 100% of your unpaid tax, whichever is smaller.

Tip: The late filing penalty can be 10 times higher than the late payment penalty. If you can’t pay your tax bill and didn’t file an extension, at least file your return as soon as possible! You can always amend it later.

  • late payment penalty applies if you didn’t pay additional taxes owed by April 18, whether you filed an extension or not.
    • The late payment penalty is 0.5% (1/2 of 1 percent) of the additional tax owed amount for every month (or fraction thereof) the owed tax remains unpaid, up to a maximum of 25%.
    • For any month(s) in which both the late-payment and late-filing penalties apply, the 0.5% late-payment penalty is waived.

3. Tax Table for TY 2016

Table 1. 2016 Taxable Income Brackets and Rates

Rate

Single Filers

Married Joint Filers

Head of Household Filers

10%

$0 to $9,225

$0 to $18,450

$0 to $12,950

15%

$9,225 to $37,450

$18,450 to$74,900

$12,951 to $49,400

25%

$37,450 to $90,750

$74,900 to $151,200

$49,401 to $127,550

28%

$90,750 to $189,300

$151,200 to $230,450

$127,551 to $206,600

33%

$189,300 to $411,500

$230,450 to $411,500

$206,601 to $405,100

35%

$411,500 to 413,200

$411,500 to 464,850

$405,101 to $432,200

39.6%

$413,200+

$464,850+

$432,201+

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4. Who is Eligible to Claim CT Motor Vehicle Credit of $ 300?

CT Motor Vehicle Credit is subject to CT adjusted gross income limit.
Single $ 62,500 or less
Married filing jointly or qualifying widow(er) $100,500 or less
Married filing separately $ 50,250 or less
Head of household $ 78,500 or less

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5. American Opportunity Credit. (Required 1099 T form from university)

The AOTC is available for four years of post secondary education and can be up to $2,500 per eligible student.  You or your dependent must have been a student enrolled at least half time for at least one academic period. Even if you don’t owe any taxes, you still may qualify. However, you must complete Form 8863, Education Credits, and file a return to claim the credit.  Learn more by visiting the IRS’ Education Credits Web page.


6. Health Care Basics:

The Affordable Care Act requires that a taxpayer and each member of their family either has qualifying health insurance coverage for each month of the year, qualifies for an exemption, or makes an individual shared responsibility payment when filing their federal income tax return. Some moderate-income taxpayers may also qualify for financial assistance to help cover the cost of health insurance purchased through the Health Insurance Marketplace. Taxpayers will fall into one or more of the following categories:

• Check the box. Most taxpayers will simply check a box on their tax return to indicate that each member of their family had qualifying health coverage for the whole year. No further action is required.

Qualifying Health Insurance Coverage includes coverage under most, but not all, types of health care coverage plans. Taxpayers can use the chart on IRS.gov/aca to find out if their insurance counts as qualifying coverage or not.

• Exemptions. Taxpayers may be eligible to claim an exemption from the requirement to have coverage.  Eligible taxpayers need to complete the new IRS Form 8965, Health Coverage Exemptions, and attach it to their tax return.  Taxpayers must apply for some exemptions through the Health Insurance Marketplace. However, most of the exemptions are easily obtained from the IRS when filing a return.

• Individual Shared Responsibility Payment. Taxpayers who do not have qualifying coverage or an exemption for each month of the year will need to make an individual shared responsibility payment with their return for choosing not to purchase coverage. Examples and information about figuring the payment are available on the IRS Calculating the Payment page.

• Premium Tax Credit.  Taxpayers who bought coverage through the Health Insurance Marketplace should receive Form 1095-A, Health Insurance Marketplace Statement, from the Marketplace by early February. This form should be saved because it has important information needed to complete a tax return.

If the Form 1095-A is not received by early February, contact the Marketplace where coverage was purchased. Do not contact the IRS because IRS telephone assistors will not have access to this information.

Taxpayers who benefited from advance payments of the premium tax credit must file a federal income tax return. These taxpayers need to reconcile those advance payments with the amount of premium tax credit they’re entitled to based on their actual income. As a result, some people may see a smaller or larger tax refund or tax liability than they were expecting.  Use IRS Form 8962, Premium Tax Credit (PTC), to calculate the premium tax credit and reconcile the credit with any advance payments.

The IRS has set up a special section at IRS.gov/aca with more information about the Affordable Care Act

The IRS urges all taxpayers, especially those claiming the premium tax credit, to make sure they have all their year-end statements in hand before they file their return. This includes Forms W-2 from employers, Forms 1099 from banks

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