Form 1040

Form 1040, Line 61 And Non-Resident Taxpayers

Like resident taxpayers, U.S. taxpayers living abroad must complete Line 61 under “Other Taxes” and “Health care: individual responsibility” on their Form 1040 or equivalent. For 2016, the IRS will not consider a return complete and accurate if the taxpayer does not report health care coverage for the year, an exemption or a payment. However, U.S. citizens filing as non-residents in foreign countries while covered by an employee health plan, or even by a foreign country’s national health care system, have different considerations when complying with the requirements of the Affordable Care Act of 2010 (“ACA”).

What You Need to Know About Deducting State and Local Taxes

Taxpayers that itemize deductions on Schedule A, (and file Form 1040) can deduct the cost of state income taxes on their federal tax return. The ability to deduct the full cost of these taxes  has its obvious advantages. Taxpayers may either claim such a deduction from state and local income taxes or state and local sales taxes, but not both. Basically, to be deductible, the tax must be imposed on a taxpayer and must have been paid during the particular tax year. Taxpayers that elect to deduct state and local general sales taxes, may use either their actual expenses or the optional sales tax tables.

REPORTING GAMBLING LOSSES AND INCOME

Americans love to gamble. Humans love to gamble for that matter. Whether you bet on football, play poker or bet on the horses, your winnings are taxable and you must report them on your tax return. The rules apply even to casual gamblers. Gambling income includes winnings from lotteries, raffles, horse races and casinos. It also includes cash and the fair market value of prizes you receive, such as cars and trips.

HOW MUCH OF MY MORTGAGE CAN I REALLY DEDUCT?

What can taxpayers deduct from their mortgage payments? What portion of a payment consisting of principal, interest, taxes and insurance, if any, is deductible? To deduct the expenses of owning a home, at least those costs paid in your mortgage payment, taxpayers must first itemize deductions.

Simply put, interest paid on a mortgage is tax deductible. Points that are paid to lower the interest rate are also deductible. Taxpayers can deduct the interest paid on first and second mortgages up to $1,000,000 in mortgage debt (the limit is $500,000 if married and filing separately). Any interest paid on first or second mortgages over this amount is not tax deductible. If the loan is not a secured debt on your home, it is considered a personal loan, and the interest you pay generally isn’t deductible.

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