IRS has just announced they will start accepting returns starting January 20, 2015 for the tax year 2014. As you know, each year Congress waits until the last minute to determine new tax laws and rates and this year was no different. However, the laws have been passed, and IRS is working on updating their software programs to accept the new laws which Congress has enacted. Most companies do not get their W2’s or 1099’s out until the end of January so most people will not be able to file until that time.
Some of the new things to be on the lookout for this year is the new Affordable Care Act requires all persons to have insurance or pay the penalty. For 2014 the penalty is $95 or 1% of AGI – whichever is greater up to a maximum of $250. The penalty increases each year until it reaches 2.5% of AGI. We still know that most people cannot get insurance for $250 a year so some have chosen to pay the penalty. This is a choice that each individual has to make. Also the penalty goes for children who are uninsured. Since the ACA (Affordable Care Act) now requires insurance to be purchased during open enrollment, the time is quickly running out for you to get insurance for 2015. I urge you to contact your insurance carrier if you do not have insurance as of yet.
Another change this year is the investment tax. This is an additional tax on higher income earners or investors that is used to pay for the ACA. This includes an additional tax on wages above $200k for individuals or $250k for couples. Again Congress punishes the married couples by making the base lower. Therefore couples can get hit pretty hard if both are high earners. However, we know that Congress does not believe in protecting families with the laws they enact.
It is important to start tax planning early in the year so you have time to take advantage of all the deductions that are available to you. Waiting until December 31st leaves very little time to plan accordingly. Let’s all start 2015 right by making the plans that we need to early so we can know our tax burden before it takes place.
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