Category: Get More Tax Clients

IRS Collection Financial Standards – National Standards for Out-of-Pocket Health Care

Please note that the IRS Collection Financial Standards are designed for the purpose of calculating repayment of overdue taxes and are effective only for federal tax administration on and after April 25, 2022. For information regarding expenses related to bankruptcy calculations, kindly visit the website of the U.S. Trustee Program.

The allowable out-of-pocket costs for health care for 2023 is $75 for under age 65 and $153 for over age 65.  It is important to note that the standard amounts may change, and thus, it is advisable to check back periodically to ensure that you have the latest version.

The table for health care expenses has been established based on data from the Medical Expenditure Panel Survey and is intended to provide minimum allowances for out-of-pocket health care expenses. These expenses include medical services, prescription drugs, and medical supplies (such as eyeglasses, contact lenses, etc.). This is most items that are bought as part of a prescription from a licensed health care professional. However, elective procedures such as plastic surgery or elective dental work are generally not allowed.

Taxpayers and their dependents are allowed the standard amount monthly on a per-person basis, without being questioned about the amounts they actually spend. In the event that the claimed amount is greater than the total allowed by the health care standards, the taxpayer must provide documentation to substantiate that the expenses are necessary living expenses. Generally, the number of individuals allowed should be the same as the number of dependents claimed on the taxpayer’s most recent year income tax return.

Furthermore, the out-of-pocket health care standard amount is allowed in addition to the amount taxpayers pay for health insurance.… Continue reading

For those tax practitioners that are still dealing with Hurricane Ida IRS tax extension. You must read this!

1) If you are in an area that is subject to the Hurricane Ida extension, I give you this word of warning now. DON’T LET YOUR CLIENTS CONTROL YOU! Don’t let their emergency be your emergency.

While you were afforded more time and it does take the pressure off of the 9/15 and 10/15 deadlines, it just creates a new one and just extends the tax season that much more.

When your clients find out they have more time, many of them will just drag their feet without any concern for you and your time.

Please do yourself a favor now and send an email, text and letter to your clients. Give them a hard deadline of say 12/10 to get their stuff to you. Just let them know that there will be a rush charge (I usually say $500) if it is received after that date AND that you cannot guarantee that it will get done if received after that date.

Let them know that with the holidays approaching, you will be taking some time off to spend with family as you always do right before the next tax season.

Trust me, I have been there done that. Back in 2004, the central Florida area was hit with 3 hurricanes (Charlie, Frances and Jean). The IRS extended the deadline to 12/30/2004 that year. That was the worst holiday season I have ever had. I never worked that much at that time of the year and vowed to never do that again.

So, for your sake, please take control of your practice and clients now. If you have already done something like this already, let me know what you have done.

2) For those of you that handle IRS Representation cases. Read this.

This was announced by an organization of which I am a member. You could always do 5 clients but 30 transcripts is the new part.

“Effective Nov. 15, tax practitioners will be able to order up to 30 Transcript Delivery System transcripts per client through the Practitioner Priority Service (PPS) or toll-free lines for most transcript types. This is an increase from the previous 10 transcripts per client limit. On the PPS, practitioners can order transcripts for up to five clients per call.”… Continue reading