Caregivers and Income Tax Filing

I have had numerous requests to blog about this topic so here we go.....

Let me state my qualifications on this topic.

• I have prepared tax returns since 2001.
• I worked for H&R Block for seven years. 
• I began my own tax preparation company in 2008.
• I was awarded the FINRA Military Spouse Fellowship in Fall 2010.
• I passed the IRS Registered Tax Return Preparer exam in July 2012.
• I became an AFCPE Accredited Financial Counselor in February 2013.
• I fully participate in the IRS Annual Filing Season Program every year. 
• I am a member of both NATP and AFCPE.  
• Oh and I've been a military spouse since 2001 and caregiver since 2011.

The topic of income tax in the wounded world is often very confusing. Many do not understand a few key concepts that can make you income tax filing a bit easier or even eliminate the need for you to file. I fully acknowledge that you need a translator to understand the IRS at times. Let me help with a bit of the translation. (Please take note I have linked sites to many items listed.)

Let's start with income itself. We have two categories: earned and unearned.

• Earned income simply means you have actually worked a job of some sort and received payment from working. You will receive a W2 or 1099 MISC from this income. If you are running your own business, you will need a detailed log of your income and expenses in order to report them. 
• Unearned income simply means the income came to you through passive means, meaning you did not work to receive it. The most common type of unearned income I see comes from interest earned from savings accounts and/or social security.

In the caregiver world here are the sources of income that primarily concern us.

• Social Security Income
• VA Caregiver Program Stipend
• VA Compensation for the Veteran
• CRSC Combat-Related Special Compensation
• Non-Medical Attendant Pay 

These sources of income are non-taxable and are unearned income. Social Security Income only becomes taxable when your earned income exceeds the limits set by the Social Security Administration. However even if your SSI is taxable it is still unearned income and will not be considered for tax credits.

Now let me post a few questions that are frequently asked.

What if my child(ren) receive Social Security?
Here's a great link that will go into further detail, but usually the child's social security income is not reported on an income tax return.

How do I receive Child Tax Credit and/or Additional Child Tax Credit?
You must first have earned income to be eligible for the credit. If you have earned income, then the credit will be calculated based on that income and the amount of qualifying child(ren) you have. Unearned Income will not qualify you for this credit.

How do I receive Earned Income Tax Credit?
Like Child Tax Credit you must have earned income to be eligible for the credit. If you have earned income, the credit will be calculated based on that income and the amount of qualifying child(ren) you have. Unearned Income will not qualify you for this credit.

How does the Affordable Care Act impact us?
Everyone must either have health care coverage or meet the requirements for an exemption. If you do not have coverage or meet the exemption then you are assessed a penalty on your income tax return. If you have only unearned income, then you will meet the requirements for an exemption. If you have Tricare, Champ VA, or other health care coverage, you will receive your 1095 form from your company for you to show your tax professional and to keep in your records.

Do we need to file a tax return?!
Visit this IRS link to find out or contact a professional.

Please remember every income tax filing situation is fact dependent. It is always best to consult a professional with any additional questions. Here are a few links to help you find a professional.

• https://www.irs.gov/uac/Authorized-IRS-e-file-Providers-for-Individuals
• https://www.irs.gov/Tax-Professionals/IRS-Tax-Pro-Association-Partners
• https://www.irs.gov/Individuals/Free-Tax-Return-Preparation-for-You-by-Volunteers
• http://www.afcpe.org/
• http://www.natptax.com/AboutNATP/Pages/Find-a-Tax-Preparer.aspx

Best wishes on your tax filing! May the odds be ever in your favor!
Jessica Allen, AFC

5 Years Ago.....

Five years ago the morning of January 22nd was so normal when it started.

Five years ago I was just another Army wife trying to get through another deployment on her own.

Five years ago our girls were 5 and 8.

Five years ago my husband was just another soldier on a routine patrol. 

Five years ago our journey began....

I have learned so much in the past five years. I have learned about myself, my character, my ethics, my heart, and my strength. I have learned that God sure knew what he was doing went he put my husband on my path. I have learned that our children are absolutely amazing. I have learned about the art of medicine. I have learned that love can really conquer all. I have learned normal doesn't really exist. And I have learned healing from the wounds of war doesn't get better, it just gets different.

I am very proud of our family's journey. We have been through a lot. We have seen a lot. And we have been blessed more than I can say. 

Everyone's journey is different. I know some have not approved of decisions we have made along the way. Maybe they were right, maybe they were wrong. One thing is for sure we made the decisions that we felt were best for the four of us.

Our journey isn't about one person; it is about our family healing together. Sure my husband was the one who stepped on the bomb and has the most visible injuries. However, others so quickly forget the wounds in the heart and mind that they cannot see. And they seldom look beyond the chair or the prosthetic legs.

When I saw my husband for the first time, I immediately noticed his legs were missing and all of the machines he was attached to. Do you know what I remember the most about that moment? The look he gave me when I walked into the room. He needed someone who loved him to tell him it was all going to be ok. That was my job on that day and it is still my job each and everyday that he or the girls need it.

This journey is never easy. As soon as one fire is put out, two more pop up. Dealing with the mounds of paperwork and drama is absolutely exhausting. I often wonder how I am not an alcoholic by now. However every January 22nd I am reminded that no matter what fire comes our way, I can remember all we have overcome since that day in 2011. These memories show me that together we can overcome anything that comes our way!

I Don't Know How You Do It?!

My title is a sentence that is said to me so often I have lost count. I thought I would give the cliff notes version of my daily schedule.

1. I get up at 4:30am Monday to Friday. On weekends I am up in the 5am hour. Why?! Because I need a good 30 minutes with my own brain before I add in any other brains into my day. 
2. The first thing I do is consume my vitamin drink then I follow it with one half of a lemon squeezed into 2 cups of warm water. I get my breakfast ready (usually a poached egg with one piece of toast and a cup of chai) and make my way to my desk.
3. One weekdays I am working by 5am. Why?! Because no one answers their emails that early. I get so much done between 5-6. I even amaze myself sometimes.
4. Kids get first wake up call at 6. They have to be at school by 730. First call is at 6, then serious wake up call is 630. We have learned that rather than rushing and panicking (which still happens sometimes) we do the multiple calls to get them moving. At some point hubby is up and moving so then this is where the me going in a gazillion directions kicks in. 
5. Once the girls are up and moving and/or at or off to school (we take turns driving them) I look at the board to see what we are doing for dinner. I live by the crockpot. My mother says our home is where crockpots go to die. I have to admit she is correct. I kill at least one crockpot per year. 
6. Then I am back to work. I spend my days bouncing between work, hubby's needs, cleaning and whatever else gets tossed in. It is really crazy, but I do find time to take a lunch break with my hubby as many times during the week as possible.
7. Kids are back home in the 3pm hour. It's homework, extra curricular activities, and chill/snack time. I try my hardest to have all of my work completed by 3. Sometimes I succeed and sometimes I fail. My ultimate goal is to give the girls as much of my time as possible since they have been gone all day.
8. Dinner is served in the 5-6pm hour. 
9. Then it's reading, baths, snacks and bed.On school nights everyone here is in bed by 8. I am usually the first one out, but 8 is our shut down and be quiet time.

Do I think everyone needs to be up at 430am? No, this is just what works for me and our home. While the first 4 hours of our day Monday-Friday are basically the same, no day is ever the same around here. We tend to stick to this format, but life happens and sometimes our format gets tossed right out the window. When we are on vaca, I usually stick pretty close to the up in the 5am hour, but everything else is up in the air. I am a creature of habit and function best on a schedule, but I do love vaca!!

As you can see I carpe that diem, then sleep, and repeat. There are 24 hours in each day, I am highly selective on which ones I chose to use as pause time. You are correct to assume I received excellent marks in school for time management. Ha!!