The Tax Professionals Blog
Tax Treatment of Mortgage Assistance Payments
Posted by Lee Reams Sr. on
We have received numerous questions related to the tax treatment of the mortgage assistance payments reported on Form 1098-MA, specifically about the taxability of these payments and the amount that is deductible as home mortgage interest.Form 1098 for 2016 Will Be a Game Changer
Posted by Lee Reams Sr. on
Form 1098, the Mortgage Interest Statement, is used to report to borrowers and the IRS any mortgage interest paid on home and other real property mortgages. This reporting is required of payment recipients (i.e., lenders) who receive mortgage interest payments of $600 or more during the year in the course of their trades or businesses. The form doesn’t need to be filed for interest received from a corporation, partnership, trust, estate or association.Medicaid Waiver Payments: A Double-Edged Sword
Posted by Lee Reams Sr. on
Background: As a means of reducing the government’s cost of caring for individuals who otherwise would be institutionalized (because they require the type of care normally provided in a hospital, nursing facility, or intermediate care facility), Medicaid will pay wages to care providers to care for these ill individuals in the care provider’s home. Until the release of Notice 2014-7, the IRS had taken the position that these payments, which are reported on a W-2, were taxable for the caregiver.Premium Tax Credit Interaction with Medicaid
Posted by Lee Reams Sr. on
We have had several questions posted related to PTC and its interaction with Medicaid. In virtually all of the cases, a spouse, child or dependent applied for and received free Medicaid coverage for 2015. In order to do that they would have had to indicate they were not in another family or did not have another family member with household income that they neglected to include in the application. Was it a mistake, misunderstanding, or fraud? At any rate they received Medicaid coverage for FREE.
Prior Year Lotto Installments & Current Year Gambling Losses
Posted by Lee Reams Sr. on
An interesting question related to deducting gambling losses was posted on our tax forum. Preparer’s client won the lottery in 2014 and chose to take installment payments for the rest of her life.