Saturday, November 21, 2015

Healthcare Coverage

For Your Information… Open enrollment for coverage through the Health Insurance Marketplace The open enrollment period to purchase health insurance coverage for 2016 through the Health Insurance Marketplace runs from Nov.1, 2015, through Jan. 31, 2015. Enroll by Dec. 15, 2015 to have coverage effective Jan. 1, 2016. Q. What documentation or proof of insurance coverage do I have to submit with my return? A. You do not need to attach documentation or proof of insurance coverage to your tax return. If you had coverage for yourself and everyone in your household for the entire year, you or your preparer will check a box on your tax return. Although nothing in the IRS rules or regulations require you to provide proof of coverage at the time you file, if you have documents that verify your coverage, you should show them to your tax preparer. The IRS will follow its normal compliance approach to filed tax returns, and may ask you to substantiate the information on your tax return, therefore you should keep these documents with your tax records. Learn more about the types of documents you should keep at our Gathering Your Health Coverage Documentation page. Q. Does everyone need to have health insurance coverage? A. The Affordable Care Act requires you and each member of your family to have basic health coverage (called minimum essential coverage), qualify for an exemption from the requirement to have coverage, or make an individual shared responsibility payment when you file your federal income tax return. If you are not required to file a tax return and don’t want to file a return, you do not need to file a return solely to report your coverage or to claim an exemption. Visit our Individual Shared Responsibility Provision page for information about what coverage qualifies, and our Exemptions page for details about who is eligible for an exemption from the requirement to have coverage. MTS will be reopening its doors the last week of December to give you quotes on your return. For more information on Healthcare Coverage to to this link.

Friday, February 7, 2014


Summary DELAYED FUNDING - Today banks industry-wide experienced unusual funding patterns impacting a significant number of taxpayers. Funding arrived a day late for taxpayers that had an expected refund date of February 6th. Taxpayers in this group that requested an ACH direct deposit should see the refund in their bank account tomorrow or Monday for those that have confirmed deposit by the IRS (some may still be delayed according to IRS review procedures). CHECKS PRINTED - Despite the delay, TPG released check print records this morning and taxpayers were able to receive their check today. MORE CHECKS COMING MONDAY- It appears that taxpayers with an expected funding date of February 10th will receive their refund amount on time, so be prepared for a number of check print records on Monday. You may run the new "Checks to Print" report from our website Monday morning to see a list of checks that will be ready to print that day. We appreciate your patience during this busy part of the season, and we are doing everything possible to maintain our reputation for superior customer support and fast, reliable data processing.

Tuesday, February 4, 2014

7 Requirements for the Child Tax Credit

To claim the Child Tax credit, you must determine if your child is eligible. There are seven qualifying tests to consider: age, relationship, support, dependent status, citizenship, length of residency and family income. You and/or your child must pass all seven to claim this tax credit. How to determine who qualifies Here’s how to determine which of your kids will qualify you for the credit: 1) Age Test To qualify, a child must have been under age 17 (i.e., 16 years old or younger) at the end of the tax year for which you claim the credit. 2) Relationship Test The child must be your own child, a stepchild, or a foster child placed with you by a court or authorized agency. An adopted child is always treated as your own child. ("An adopted child" includes a child lawfully placed with you for legal adoption, even if that adoption is not final by the end of the tax year.) You can also claim your brother or sister, stepbrother, stepsister. And you can claim descendents of any of these qualifying people — such as your nieces, nephews and grandchildren — if they meet all the other tests. 3) Support Test To qualify, the child cannot have provided more than half of his or her own financial support during the tax year. 4) Dependent Test You must claim the child as a dependent on your tax return. Bear in mind that in order for you to claim a child as a dependent, he or she must: 1) be your child (or adoptive or foster child), sibling, niece, nephew or grandchild; 2) be under age 19, or under age 24 and a fulltime student for at least five months of the year; or be permanently disabled, regardless of age; 3) have lived with you for more than half the year; and 4) have provided no more than half his or her own support for the year. 5) Citizenship Test The child must be a U.S. citizen, a U.S. national or a U.S. resident alien. (For tax purposes, the term "U.S. national" refers to individuals who were born in American Samoa or in the Commonwealth of the Northern Mariana Islands.) 6) Residence Test The child must have lived with you for more than half of the tax year for which you claim the credit. There are important exceptions, however: A child who was born (or died) during the tax year is considered to have lived with you for the entire year. Temporary absences by you or the child for special circumstances, such as school, vacation, business, medical care, military services or detention in a juvenile facility, are counted as time the child lived with you. (There are also some exceptions to the residency test for children of divorced or separated parents. For details, see the instructions for Form 1040, lines 51 and 6c, or Form 1040A, lines 33 and 6c.) 7) Family Income Test The child tax credit is reduced if your modified adjusted gross income (MAGI) is above certain amounts, which are determined by your tax-filing status. The phase out threshold is $55,000 for married couples filing separately; $75,000 for single, head of household, and qualifying widow or widower filers; and $110,000 for married couples filing jointly. For each $1,000 of income above the threshold, your available child tax credit is reduced by $50. What if the credit exceeds my tax liability? The Child Tax Credit is nonrefundable; if your credit exceeds your tax liability, your tax bill is reduced to zero and any remaining unused credit is lost. However, you may be able to claim a refundable Additional Child Tax Credit for the unused balance. You can find out if you're eligible for this refundable credit by completing the worksheet in IRS Form 8812. Remember, when you file your taxes with TurboTax, we’ll ask simple questions about you and your kids and figure out exactly how much of the Child Tax credit you’re eligible to receive.

Monday, January 13, 2014

5 Tips for Preparing for 2014 Taxes

Tax planning very rarely makes it on people’s new year’s resolution lists. But perhaps 2014 should be the year you vow to achieve a greater level of understanding about your taxes and to properly organize and plan for your liability.
Not only would this pledge make your life easier come tax season, it could also end up keeping more money in your bank account.

Here are some tips to get rolling on fulfilling this resolution:

Set up your 2014 tax file.

This could be an electronic file in which you scan documents and transactions throughout the year that will affect your tax return, or a folder or bin that holds the information.

The beauty of an electronic file is that at tax time you can simply e-mail it to your tax professional, who will likely also maintain the file in the event of an audit. Just make sure you have adequate back up of your data in case something goes wrong. Adding notes on the tax documents to aid your tax pro in understanding the transaction can help the filing process.

Examples of documents to store for tax purposes include: W2s, 1099s, K-1s, escrow papers for purchase, sale of refinance of properties, receipts for property tax and vehicle registration fees, receipts for other tax deductible items, and acknowledgement letters from donations made to qualified nonprofit organizations.

Schedule a mid-year tax planning appointment if your financial situation will change this year from last year.
If you plan to get married or divorced, buy or sell  a home, start a family, or experience any other financially-altering  event in 2014, it’s a good idea to meet with a professional to do some tax planning. However, I advise against scheduling a planning session at the height of tax season--your tax pro will likely get hysterical.

Make plans to fund your retirement plan.

If you have a retirement plan at work, check to see if you qualify to contribute more to the plan and to make sure you are taking advantage of an employer match.

If you have no retirement plan in place, open an IRA, ROTH IRA or other such plan. Your bank or investment house will be able to help you decide between various instruments to find one that best fits your financial situation. A tax professional can also weigh in on which type of savings vehicle would work best for a particular situation. This will not only reduce your current year tax liability, but it will help provide for your future. With so much uncertainty surrounding the viability of Social Security and Medicare (which experienced cuts this past year), it is important to look out for yourself.

Log estimated tax payments, log the dates and amounts into your calendar.

The IRS penalizes those who do not prepay their income tax liabilities in a timely manner. The dates for the four installments of your 2014 estimates for individuals filing on a calendar year basis are: April 15, June 16, Sept. 15, and Jan. 15, 2015.

Follow tax legislation news.

Tax law changes rapidly and what you may think is a valuable deduction or credit for your tax return may have been obliterated by a Congressional whim. I’ve encountered many disappointed clients who were counting on a credit or deduction that no longer exists.

Best wishes to you all for a happy, healthy, prosperous and tax-savvy new year!


Sunday, December 29, 2013

The Basics of Child Tax Benefits

The cost of raising children steadily increases annually and can strain the family budget. After food, clothing, insurance and educational costs, your little bundle can easily cost you a bundle. Fortunately, there are a number of federal tax breaks to offset the cost of raising a child. One of the most popular and beneficial is the child tax credit.

The child tax credit allows you to claim a maximum of $1,000 per qualified child. And thanks to the American Taxpayer Relief Act enacted January 2013, this tax break is one of several family-friendly tax breaks that’ll be around for at least another five years.

The intent of the child tax credit is to assist middle and lower class income earners. Therefore, the amount of the child tax credit is gradually lowered based upon higher income levels. For some taxpayers, the child tax credit can reduce their federal income tax liability to zero, and any remaining or excess child tax credits might be refundable to the taxpayer. Technically, there’s no limit as to how many children can be claimed for a child tax credit; however, additional dependents could require the taxpayer to pay alternative minimum tax.

A taxpayer will be eligible for the child tax credit if all the following criteria are met:
  • The child is related to the taxpayer as a daughter, son, adopted child, stepchild, foster child, sister or brother or descendant such as a nephew, niece or grandchild.
  • The child was under the age of 17 at the end of the year (i.e. the child is 16 or younger.)
  • The child lived with the taxpayer for over half of the tax year.
  • The child provided under half of their own financial support.
  • The child is a U.S. citizen, or a dependent that is not a U.S. citizen but has lived in the U.S. and is a resident.
  • The child meets criteria as a dependent of the taxpayer as described above.
If in doubt, contact one of our certified tax professionals at or visit our location at 3275 Snapfinger Road, Lithonia, GA 30038.

Phaseouts and Income Limitations

Like other credits, the child tax credit is gradually reduced based upon taxpayer income. Reduction begins at the following levels:
  • $75,000 for head of household, single and qualifying widow/widower tax filers
  • $55,000 for married couples who are filing separately
The child tax credit is reduced by $50 for each $1,000 of income over these thresholds.

Forms and Reference Material

Most filers can calculate their child tax credit with a worksheet found within the Form 1040 instructions. Publication 972 discusses the child tax credit in greater detail, and Publication 17, Chapter 34 also provides information about the child tax credit. Use Schedule 8812 when calculating the refundable portion of the child tax credit or reporting dependents who have an Individual Taxpayer Identification Number instead of a Social Security number.
Taxpayers can claim the child tax credit using either Form 1040 or the shorter version Form 1040A.

Friday, December 27, 2013

Seamless Process

We are quickly approaching tax season, and we are excited to inform you of our new Seamless Process!  We have reached out to many of you with the intent of finding an easier and time effective way to better service you this tax season.

Our research found that most of you would like to have the ability to have your taxes done without the hassle of waiting in line, fighting through traffic to reach our location before the close of business, and most important to have the ability to get your taxes done from the comfort of your own home. So we developed the perfect process to allow you to do just that.

Our Seamless Process will allow you to send your w2’s via smartphone, email, or fax. 

·        Using a smartphone simply take a picture of your w2 and all necessary forms and text to your personal Magic Tax Consultant.

·        If sending via email, simply scan w2 and all necessary forms to your computer and email to please make sure to include the name of your Tax Consultant and any necessary notes needed to complete your taxes.

·         If faxing simply fax your forms to our fax number 404-585-4387 and make it to the attention of your tax consultant.

Easy, Simple and Seamlesswe will get back to you within 24 hours with your completed tax return.

And for those of you who enjoy our company as much as we enjoy yours, we will still have our doors open to you.

We look forward to making your tax season pleasant and profitable. Thank you for choosing Magic Tax Solutions!

The Magic Tax Family

P : 404-551-3008
F: 404-585-4387

Thursday, December 26, 2013

5 Tax Credits That Could Get You A Refund

A tax credit reduces the amount of tax you must pay. A refundable tax credit not only reduces the federal tax you owe, but also could result in a refund.

Here are five credits the IRS wants you to consider before filing your 2012 federal income tax return:
    1. The Earned Income Tax Credit is a refundable credit for people who work and don’t earn a lot of money. The maximum credit for 2012 returns is $5,891 for workers with three or more children. Eligibility is determined based on earnings, filing status and eligible children. Workers without children may be eligible for a smaller credit. If you worked and earned less than $50,270, you may still qualify for partial credit. Visit Magic Tax Solutions and speak to one of our tax professionals.

    2. The Child and Dependent Care Credit is for expenses you paid for the care of your qualifying children under age 13, or for a disabled spouse or dependent. The care must enable you to work or look for work.
    3. The Child Tax Credit may apply to you if you have a qualifying child under age 17. The credit may help reduce your federal income tax by up to $1,000 for each qualifying child you claim on your return. You may be required to file the new Schedule 8812, Child Tax Credit, with your tax return to claim the credit.

    4. The Retirement Savings Contributions Credit (Saver’s Credit) helps low-to-moderate income workers save for retirement. You may qualify if your income is below a certain limit and you contribute to an IRA or a retirement plan at work. The credit is in addition to any other tax savings that apply to retirement plans.

    5. The American Opportunity Tax Credit helps offset some of the costs that you pay for higher education. The AOTC applies to the first four years of post-secondary education. The maximum credit is $2,500 per eligible student. Forty percent of the credit, up to $1,000, is refundable. You must file Form 8863, Education Credits, to claim it if you qualify.
Visit Magic Tax Solutions for a FREE quote on your tax return. We are located at 3275 Snapfinger Road, Lithonia, Georgia 30038. You can also visit our website at