TAX TIPS for 2014! Besides Obamacare, many key changes surfaced in 2014. Most of the changes are geared toward an increase in taxes. Some of the tax disadvantages comprise the elimination of the healthcare coverage deduction, the mortgage insurance premium deduction, home energy credits, and home-mortgage debt forgiveness deduction. The 2014 changes also include an increase of the threshold to claim itemized medical expenses from 7.5% to 10% of AGI for most taxpayers. As a result, it will be more difficult to deduct medical expenses on Schedule-A (itemized deduction). For instance, if you make $100,000 (AGI), you may only deduct medical expenses in excess of $10,000 (used to be $7,500). In 2014 you must have health insurance. Otherwise, you may pay a penalty of the higher of $95 or 1% of your income for the year. This penalty will increase over the course of next few years. However you will not pay a penalty if one of the 9 exemptions applies to you. Some of the exemptions are nonresident taxpayers (including dreamers and TPS holders), and low-income individuals incapable of buying insurance. Although we’re in January 2015, you may still use some legal strategies to pay less taxes and have a greater refund for 2014 such as IRA (Individual retirement account) and other qualified plans. For instance if your income is $54,000 and you contribute $5,000 towards a traditional IRA on January-April 15, 2015 for tax year 2014, your income will be taxed at 49,000 not the 54,000. Furthermore you may qualify for other credits since your income in lower. For those of you who are not accountants and do not file easy tax returns, I strongly recommend that you hire a professional to do your taxes and most importantly to help you in tax planning strategies for the current year. Have a good tax season!!! Rodney Jean-Baptiste, CPA, CMA, EA, Ph.D. Contact Rodney@Financetec Website: Financetec Post your comments and questions!
Posted on: Tue, 06 Jan 2015 01:30:59 +0000
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