Most of us have heard of “concierge medicine” and it’s gaining popularity, especially among executives.  As more people enroll, more questions are popping up that we haven’t heard before.  One of the most frequent questions we’ve heard is, “Can I fund the cost of the concierge with my health savings account (HSA) or flexible spending account (FSA)?”

The answer is an absolute “maybe!”

Why, the squishy answer?  It’s because not all medical concierge services operate alike and the portion of the expenses that are qualified aren’t always in a particular model.

Here’s a brief description of the four prevalent models of concierge services and what is qualified for reimbursement:

1. Fees for Care.  In this model, the participant subscribes to a medical concierge to have access to care.  At the time services are rendered, additional fees are charged that are directly related to the medical care given.  The subscription portion of the fee is not eligible, but generally the amount related to actual care provided would be considered as an eligible medical expense under the HSA guidelines.
2. Annual Physical. Here a fee is charged for an annual physical, usually more comprehensive than covered under the Patient Protection and Affordable Care Act (PPACA) requirements, and the model includes no additional non-medical services or “amenities.”  The physical is considered to be medical care and would also generally be considered an eligible medical expense under the HSA guidelines.  If the fee is payable up front, it would only be reimbursable once the physical has actually been performed.
3. Annual Physical Plus Amenities. Here a fee is charged for an annual physical and with it some additional non-medical services (amenities) are added. The physical is considered to be medical care and would generally be considered an eligible medical expense under the HSA guidelines, assuming the billing outlines the service(s) and their associated cost(s).The amenities (e.g., retainer fess, access fees, or expedited appointment access to a physician, etc.) are not eligible medical expenses under the HSA guidelines even if the bill has a line item for the access or amenities portion. If the medical provider only furnishes a global bill with no itemization for specific services, it may be difficult to substantiate the service was an eligible expense.
4. Amenities Only. Here the fees are exclusively for access to the medical concierge.  These fees pay for the amenities like retainer fees, access fees, or expedited appointment access. These are not qualified medical expenses and, therefore, are generally not eligible for reimbursement through the participants HSA or FSA.

A quick rule of thumb is if the bill is directly related to a qualified medical service or expense, it is reimbursable.  If it is only for access to, or the right to “get in the door,” then it is not a qualified medical expense for HSA/FSA reimbursement purposes.  As with everything, there are exceptions and qualifications and only the participant’s qualified tax consultant can properly advise.

Finally, the participant can reimburse him/herself from his/her HSA or send payment to the medical concierge directly from his/her HSA regardless of the qualification of the expense.  If the expense is non-qualified, they simply have to declare non-qualified disbursals on their Federal Income Tax and pay both the appropriate ordinary income tax as well as the excise penalty of 20% of the disbursement.

By Dave Woodruff
The A.I. Group, Inc.

http://analytics.ubabenefits.com/blog/bid/334713/Funding-Concierge-Medicine-Costs-with-HSAs-FSAs

Though the tax season is over, tax scammers work year-round. The IRS advises you to stay alert to protect yourself against new ways criminals pose as the IRS to trick you out of your money or personal information. These scams first tried to sting older Americans, newly arrived immigrants and those who speak English as a second language. The crooks have expanded their net, and now try to swindle virtually anyone. Here are several tips from the IRS to help you avoid being a victim of these scams:

• Scams use scare tactics.  These aggressive and sophisticated scams try to scare people into making a false tax payment that ends up with the criminal. Many phone scams use threats to try to intimidate you so you will pay them your money. They often threaten arrest or deportation, or that they will revoke your license if you don’t pay. They may also leave “urgent” callback requests, sometimes through “robo-calls,” via phone or email. The emails will often contain a fake IRS document with a phone number or an email address for you to reply.
• Scams use caller ID spoofing.  Scammers often alter caller ID to make it look like the IRS or another agency is calling. The callers use IRS titles and fake badge numbers to appear legit. They may use online resources to get your name, address and other details about your life to make the call sound official.
• Scams use phishing email and regular mail.  Scammers copy official IRS letterhead to use in email or regular mail they send to victims. In another new variation, schemers provide an actual IRS address where they tell the victim to mail a receipt for the payment they make. All in an attempt to make the scheme look official.
• Scams cost victims over $20 million.  The Treasury Inspector General for Tax Administration, or TIGTA, has received reports of about 600,000 contacts since October 2013. TIGTA is also aware of nearly 4,000 victims who have collectively reported over $20 million in financial losses as a result of tax scams.

The real IRS will not:

• Call you to demand immediate payment. The IRS will not call you if you owe taxes without first sending you a bill in the mail.
• Demand that you pay taxes and not allow you to question or appeal the amount that you owe.
• Require that you pay your taxes a certain way. For instance, require that you pay with a prepaid debit card.
• Ask for credit or debit card numbers over the phone.
• Threaten to bring in police or other agencies to arrest you for not paying.

If you don’t owe taxes or have no reason to think that you do:

• Do not provide any information to the caller. Hang up immediately.
• Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident.
• You should also report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.

If you know you owe, or think you may owe taxes:

• Call the IRS at 800-829-1040. IRS workers can help you if you do owe taxes.

Stay alert to scams that use the IRS as a lure. For more, visit “Tax Scams and Consumer Alerts” on IRS.gov.

People often change their job in the summer. If you look for a job in the same line of work, you may be able to deduct some of your job search costs. Here are some key tax facts you should know about if you search for a new job:

• Same Occupation.  Your expenses must be for a job search in your current line of work. You can’t deduct expenses for a job search in a new occupation.
• Résumé Costs.  You can deduct the cost of preparing and mailing your résumé.
• Travel Expenses.  If you travel to look for a new job, you may be able to deduct the cost of the trip. To deduct the cost of the travel to and from the area, the trip must be mainly to look for a new job. You may still be able to deduct some costs if looking for a job is not the main purpose of the trip.
• Placement Agency. You can deduct some job placement agency fees you pay to look for a job.
• First Job.  You can’t deduct job search expenses if you’re looking for a job for the first time.
• Substantial Job Break.  You can’t deduct job search expenses if there was a long break between the end of your last job and the time you began looking for a new one.
• Reimbursed Costs.  Reimbursed expenses are not deductible.
• Schedule A.  You usually deduct your job search expenses on Schedule A, Itemized Deductions. You’ll claim them as a miscellaneous deduction. You can deduct the total miscellaneous deductions that are more than two percent of your adjusted gross income.
• Premium Tax Credit.  If you receive advance payments of the premium tax credit it is important that you report changes in circumstances, such as changes in your income or eligibility for other coverage, to your Health Insurance Marketplace. Other changes that you should report include changes in your family size or address.  Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.

1. You make too much money.  The IRS will target those with incomes above $200,000. You have a 1 in 30 chance of being audited.
2. Not reporting taxable income. You must report all 1099s and W-2s, even if you believe them to be incorrect. (Deal with the discrepancies after filing.)
3. You give a lot of money to charity. The IRS knows what others who make similar income to you tend to give and will question you if you’re claiming too much.
4. Claiming day-trading losses on Schedule C.
5. Claiming rental losses.
6. Deducting business meals, travel and entertainment.
7. Claiming 100% business use of a vehicle. Be careful, salespeople! To counter any possible IRS questions, I know someone who keeps a paper log on the dashboard and writes down every mile for work, the date and what it was for. If you do want to claim all the cost for a business expense, be sure you have another vehicle too.
8. Writing off a loss for a hobby.
9. Claiming a home office deduction.
10. Taking an alimony deduction.
11. Running a business where almost all money is in cash.
12. Not reporting a foreign bank account.
13. Engaging in currency transactions.
14. Taking excessive deductions. Again, the IRS knows what is outside normal bounds based on your income.

A timeshare is not only a great opportunity to get away for a while, it can be a wonderful investment. Not only does your timeshare qualify for some of the same types of deductions that other property would get you, there are some specific types of deductions you may be able to claim depending on what type of timeshare you have and how you use it.

Let’s take a look at some of the best tax deduction opportunities for your timeshare:

1. Maintenance fees. The money you pay to maintain the property may be tax deductible, but only if you rent your timeshare. If you own the timeshare outright, however, you can’t deduct the maintenance fees. This is one of the rare cases where you have access to a deduction when renting that you won’t have access to if you own the property or if you have a secured loan on the property.
2. Loan interest payments. Here again, it depends on the exact status of your timeshare. If you’re still making those initial purchase price payments for the timeshare, then the interest can be taxed. However, if you have a secured loan on the timeshare property then you may be able to deduct your interest.
3. Property tax deductions. If you’re paying property taxes on your timeshare, and if they are billed separately from your maintenance charges, then you should be able to deduct them as well. If they’re billed the same, you’ll have a harder time deducting those payments. In some cases, it’s simply a matter of asking the management company to send you an itemized bill that shows exactly how much you’re paying in maintenance fees versus how much you’re paying for property taxes.
4. Donations. If you donate a timeshare to charity instead of selling it, then you’re going to be entitled to a tax rebate equal to the fair market value of your property. This requires an independent appraisal so you can back up the amount that you’re claiming. There are specific regulations about how much that can be, and a limit to the amount you can claim as a deduction, as well.
5. Rental-use deductions. If you own a timeshare that you rent out to someone else, you may be eligible for a rental-use tax deduction on that timeshare.

These are just some of the more common and best tax deductions you can claim on your timeshare; there may be others, depending on the specifics of your timeshare and where it’s located.

In addition, as you prepare your taxes, keep these principles in mind in regard to those timeshare tax deductions:

• The most important factor in how you file your tax deductions in regard to your timeshare is your ownership status. There are some deductions that work only if you own the property, or if you have a secured loan on the property. If you’re purchasing a timeshare on a lease-purchase agreement or still making the down payment, you’re going to miss out on the best deductions.
• When in doubt, talk to a tax professional. The last thing you want to do is face an audit situation where you’ve claimed deductions you weren’t entitled to. Talk to a tax professional who has a comprehensive tax education about navigating those timeshare tax deductions to make sure you get all of those that are coming to you, and that you don’t inadvertently claim one that isn’t.
• You can only claim deductions on a single timeshare. If you own multiple timeshare properties, you’re going to be limited to claiming the deductions on only one of those properties.
• Don’t forget the income implications of a timeshare. If you rent your timeshare out, you’re going to have to pay taxes on that income. Make sure you know the implications before you rent.
• State and local tax implications may vary. Depending on where your timeshare is located, there may be specific incentives you can take advantage of. Be sure to talk to your tax professional about these, as well.

If you’re smart about it and take advantage of all of the available tax deductions, your timeshare can be a wonderful investment. Make sure you understand the tax laws in your area, and that you keep up with the changes that may take place to the tax code at the federal level each year as well.

Taken from: http://www.certifiedtaxcoach.org/blog/best-tax-deductions-for-timeshares/

If you are in the U. S. Armed Forces, special tax breaks may apply to you. For example, some types of pay are not taxable. Certain rules apply to deductions or credits that you may be able to claim that can lower your tax. In some cases, you may get more time to file your tax return. You may also get more time to pay your income tax. Here are the top 10 IRS tax tips about these rules:

1. Deadline Extensions.  Some members of the military, such as those who serve in a combat zone, can postpone some tax deadlines. If this applies to you, you can get automatic extensions of time to file your tax return and to pay your taxes.
2. Combat Pay Exclusion.  If you serve in a combat zone, certain combat pay you get is not taxable. You won’t need to show the pay on your tax return because combat pay is not part of the wages reported on your Form W-2, Wage and Tax Statement. If you serve in support of a combat zone, you may qualify for this exclusion.
3. Earned Income Tax Credit or EITC.  If you get nontaxable combat pay, you can include it to figure your EITC. Doing so may boost your credit. Even if you do, the combat pay stays nontaxable.
4. Moving Expense Deduction.  You may be able to deduct some of your unreimbursed moving costs. This applies if the move is due to a permanent change of station.
5. Uniform Deduction.  You can deduct the costs of certain uniforms that you can’t wear while off duty. This includes the costs of purchase and upkeep. You must reduce your deduction by any allowance you get for these costs.
6. Signing Joint Returns.  Both spouses normally must sign a joint income tax return. If your spouse is absent due to certain military duty or conditions, you may be able to sign for your spouse. In other cases when your spouse is absent, you may need a power of attorney to file a joint return.
7. Reservists’ Travel Deduction.  If you’re a member of the U.S. Armed Forces Reserves, you may deduct certain costs of travel on your tax return. This applies to the unreimbursed costs of travel to perform your reserve duties that are more than 100 miles away from home.
8. ROTC Allowances.  Some amounts paid to ROTC students in advanced training are not taxable. This applies to allowances for education and subsistence. Active duty ROTC pay is taxable. For instance, pay for summer advanced camp is taxable.
9. Civilian Life.  If you leave the military and look for work, you may be able to deduct some job search expenses. You may be able to include the costs of travel, preparing a resume and job placement agency fees. Moving expenses may also qualify for a tax deduction.
10. Tax Help.  Most military bases offer free tax preparation and filing assistance during the tax filing season. Some also offer free tax help after April 15.

In most cases, gains from sales are taxable. But did you know that if you sell your home, you may not have to pay taxes? Here are ten facts to keep in mind if you sell your home this year.

1. Exclusion of Gain.  You may be able to exclude part or all of the gain from the sale of your home. This rule may apply if you meet the eligibility test. Parts of the test involve your ownership and use of the home. You must have owned and used it as your main home for at least two out of the five years before the date of sale.
2. Exceptions May Apply.  There are exceptions to the ownership, use and other rules. One exception applies to persons with a disability. Another applies to certain members of the military. That rule includes certain government and Peace Corps workers. For more on this topic, see Publication 523, Selling Your Home.
3. Exclusion Limit.  The most gain you can exclude from tax is $250,000. This limit is $500,000 for joint returns. The Net Investment Income Tax will not apply to the excluded gain.
4. May Not Need to Report Sale.  If the gain is not taxable, you may not need to report the sale to the IRS on your tax return.
5. When You Must Report the Sale.  You must report the sale on your tax return if you can’t exclude all or part of the gain. You must report the sale if you choose not to claim the exclusion. That’s also true if you get Form 1099-S, Proceeds From Real Estate Transactions. If you report the sale, you should review the Questions and Answers on the Net Investment Income Tax on IRS.gov.
6. Exclusion Frequency Limit.  Generally, you may exclude the gain from the sale of your main home only once every two years. Some exceptions may apply to this rule.
7. Only a Main Home Qualifies.  If you own more than one home, you may only exclude the gain on the sale of your main home. Your main home usually is the home that you live in most of the time.
8. First-time Homebuyer Credit.  If you claimed the first-time homebuyer credit when you bought the home, special rules apply to the sale. For more on those rules, see Publication 523.
9. Home Sold at a Loss.  If you sell your main home at a loss, you can’t deduct the loss on your tax return.
10. Report Your Address Change.  After you sell your home and move, update your address with the IRS. To do this, file Form 8822, Change of Address. You can find the address to send it to in the form’s instructions on page two. If you purchase health insurance through theHealth Insurance Marketplace, you should also notify the Marketplace when you move out of the area covered by your current Marketplace plan.

If you, your spouse or a dependent are heading off to college in the fall, some of your costs may save you money at tax time. You may be able to claim a tax credit on your federal tax return. Here are some key IRS tips that you should know about e tax credits:

• American Opportunity Tax Credit.  The AOTC is worth up to $2,500 per year for an eligible student. You may claim this credit only for the first four years of higher education. Forty percent of the AOTC is refundable. That means if you are eligible, you can get up to $1,000 of the credit as a refund, even if you do not owe any taxes.

• Lifetime Learning Credit.  The LLC is worth up to $2,000 on your tax return. There is no limit on the number of years that you can claim the LLC for an eligible student.

• One credit per student.  You can claim only one type of education credit per student on your tax return each year. If more than one student qualifies for a credit in the same year, you can claim a different credit for each student. For instance, you can claim the AOTC for one student, and claim the LLC for the other.

• Qualified expenses.  You may use qualified expenses to figure your credit. These include the costs you pay for tuition, fees and other related expenses for an eligible student. Refer to IRS.gov for more on the rules that apply to each credit.

•  Eligible educational institutions.  Eligible schools are those that offer education beyond high school. This includes most colleges and universities. Vocational schools or other postsecondary schools may also qualify. If you aren’t sure if your school is eligible:

o Ask your school if it is an eligible educational institution, or

o See if your school is on the U.S. Department of Education’s Accreditation database.

• Form 1098-T.  In most cases, you should receive Form 1098-T, Tuition Statement, from your school by Feb. 1, 2016. This form reports your qualified expenses to the IRS and to you. The amounts shown on the form may be different than the amounts you actually paid. That might happen because some of your related costs may not appear on the form. For instance, the cost of your textbooks may not appear on the form. However, you still may be able to include those costs when you figure your credit. Don’t forget that you can only claim an education credit for the qualified expenses that you paid in that same tax year.

• Nonresident alien.  If you are in the United States on an F-1 Student Visa, the tax rules generally treat you as a nonresident alien for federal tax purposes.  To find out more about your F-1 Student Visa status, visit U.S. Immigration Support. To learn more about resident and nonresident alien status and restrictions on claiming the education credits, refer toPublication 519, U.S. Tax Guide for Aliens.

• Income limits. These credits are subject to income limitations and may be reduced or eliminated, based on your income.

By Sally P. Schreiber, J.D.

Tax software vendors will share analytical information about their customers’ tax filings with the IRS under new agreement announced by the IRS on Thursday. The IRS called the agreement “a sweeping new collaborative effort” to fight identity theft refund fraud in which it will partner with tax preparation and software firms, payroll and tax financial product processors, and state tax administrators (IR-2015-87).

The effort involves identifying new steps to validate taxpayer and tax return information at the time of filing, using increased information sharing between industry and governments. The tax industry has agreed to share suspected identity fraud information and analytics to identify fraud schemes and discover indicators of fraud patterns.

“This agreement represents a new era of cooperation and collaboration among the IRS, states, and the electronic tax industry that will help combat identity theft and protect taxpayers against tax refund fraud,” IRS Commissioner John Koskinen said in a press release. “Taxpayers filing their tax returns next filing season should have a safer and more secure experience.”

Three specialized working groups were established when the project kicked off in March. They are: Authentication; Information Sharing; and Strategic Threat Assessment and Response (2015 Security Summit). Each team has members from the IRS, states, and industry. Since then, the teams have focused on ways to validate the authenticity of taxpayers and the information they include on their tax returns, ways to improve information sharing to increase detection and prevention of refund fraud, and threat assessment and strategy development to prevent risks and threats.

The IRS also announced the following new initiatives:

Taxpayer authentication. The working groups identified new data that can be shared at the time of filing to help authenticate a taxpayer and detect identity theft refund fraud. The data will be submitted to the IRS and states with the tax return transmission for the 2016 filing season. These include:

• Reviewing the tax return transmission, including improper and/or repetitive use of an Internet Protocol number, which is the internet “address” from which the return originates;
• Reviewing computer device identification from the return’s origin;
• Reviewing the time it takes to complete a tax return, so computer-mechanized fraud can be detected; and
• Capturing metadata in the computer transaction to permit review for identity-theft-related fraud.

Identifying fraud. The groups agreed to expand sharing of fraud leads. Under the agreement, for the first time, the entire tax industry will share aggregated analytical information about their filings with the IRS. In the past, this post-return filing process has produced valuable fraud information because trends are easier to identify with aggregated data. Currently, the IRS obtains this analytical information from some groups.

Assessing information. In addition to continuing existing efforts, the groups will look to establish a formal Refund Fraud Information Sharing and Assessment Center to more efficiently share information between the public and private sectors to help stop fraud schemes. The IRS says this project would be helpful in many ways, including providing better information to assist law enforcement in investigating and prosecuting identity thieves.

Cybersecurity framework. Tax industry participants agreed to align their practices with the National Institute of Standards and Technology cybersecurity framework that the IRS and states currently operate under. (Many in the tax industry already operate under this standard.)

Increasing taxpayer awareness and communication. The IRS, industry, and the states agreed to increase their efforts to inform taxpayers about protecting sensitive personal, tax, and financial data to help prevent refund fraud and identity theft. These efforts, which have already started, will increase through the year and expand, in particular, for the 2016 filing season.

Continuous improvement

According to the announcement, the parties to the agreement recognize the need to continuously improve the tax system’s defenses for combating this threat to taxpayers and the tax system, including improving multilevel identity proofing and authentication capability that anticipates and stops threats.

The ability to answer knowledge-based authentication questions, known as “out-of wallet” questions, about taxpayers financial dealings such as car or mortgage payments was the reason the cybercriminals successfully breached the Get Transcript application system.

By Courtney L. Vien

Financial abuse more frequently hurts senior citizens emotionally than it does financially, according to a recent survey of CPA financial planners.

Thirty-seven percent of the 266 planners polled in the AICPA PFP Trends Survey in May rated the emotional impact of elder financial abuse as “substantial.” Yet just 5% rated the financial impact of such abuse as “substantial.”

The reason elder financial abuse causes such emotional pain may be the fact that family members are often the perpetrators. Seventy-two percent of planners said that during the last five years, they’d had elderly clients who were unable to refuse family members’ requests for gifts or loans. Fifty-seven percent said they’d had older clients who were supporting nondisabled adult children.

Nearly 4 out of 5 financial planners (79%) reported that they had clients fall victim to internet or phone scams in the past five years. Half had clients whose identities were stolen.

Though slightly less than half of the financial planners surveyed (47%) said they thought elder abuse was on the rise, 73% said they encountered it at least a few times a year.

Financial planners have also had to address other concerns of aging clients, the survey found, including where clients should live in their declining years. Planners said that they had helped 15% of their elderly clients make decisions about housing or perform nursing home due-diligence analysis in the past year. Forty-four percent said they provide such assistance more often now than they did five years ago.

CPA financial planners use several strategies to protect clients from elder financial abuse, including conducting periodic reviews of their financial plans and encouraging clients to run all major financial decisions past them. If clients show signs of diminished mental capacity or have a difficult time saying “no” to their relatives’ requests, financial planners may recommend placing their assets in a revocable living trust and naming a co-trustee.

Planners also suggest that advisers get to know members of their older clients’ “support teams,” including their loved ones and those authorized to make medical decisions on their behalf. As the survey found, spouses are the “team members” most likely to attend elder planning meetings alongside clients. They participate 77% of the time, whereas attorneys attend 39% of the time, and adult children attend 37% of the time.