The IRS has been busy this year updating the tax code, making rule changes, and updating tax forms. We all know how complicated taxes can be, especially when you expand your family, purchase property, or begin to build a robust financial portfolio. The best way to stay abreast of any changes is to connect with a knowledgeable tax practitioner. If you’ve got a tax issue, then contact Inside Out Tax Resolution Services today to get your free consultation.
The 1040-SR Form
Every year just about everyone fills out an income tax return or Form 1040 to report their annual income to the IRS. This tax form has been universal for decades, but income has many different forms that can change dramatically throughout many stages of life. In order to streamline this reporting process, the IRS has made an updated form so that people over the age of 65 can more easily report their income. This form was created to help people near retirement, or retired individuals report their income, which oftentimes comes from social security, interest from retirement funds, and other alternative forms of retirement income. With the addition of this new form, seniors and retired people alike will find it much easier to file their taxes.
23andMe & More
In a recent decision, the IRS has ruled that the health section of genetic-testing kits like 23andMe qualifies as medical care under the current tax code. This ruling means a wide variety of things are now possible for people interested in trying one of these testing kits. The IRS will now allow taxpayers to deduct a portion of the cost of the kit on their Form 1040, or you can use tax-exempt money in a health savings account (HSA) to pay for the kit. This ruling was specifically issued to 23andMe and it covers $117.74 of the $199 cost of the kit. If you are interested in trying one of these new kits, it is now more affordable than ever to explore this option.
The IRS has been focusing on expanding its healthcare coverage options this year, and they have expanded the definition of preventative care under HDHP, or high-deductible health plans. The IRS will now allow contributions to be made to a health savings account by a taxpayer only if the taxpayer’s medical insurance qualifies as an HDHP. HDHPs only cover preventative care, and as an attempt to expand this coverage, the IRS has ruled that preventative care now covers medical services and medications for chronic illnesses like statins for heart disease, blood pressure monitors for hypertension, beta-blockers, SRIs, and other medications.
The IRS has been working tirelessly this year to update outdated sections of the tax code and to make filing taxes more intuitive. If you want to get more information for a tax issue you’ve been struggling with, then come into Inside Out Tax Resolution Services to get help today.