We hope everyone enjoyed the holiday season and we wish you a healthy and prosperous New Year. We are gearing up for another successful filing season and are available if you have any questions as you accumulate your information. Congress extended a number of expiring provisions in December. The Internal Revenue Service has announced no delays are expected with the passage of the late tax law changes and they will begin accepting tax returns on January 20, 2015.
Extended tax breaks (through 2014) applicable to individuals included, among others:
• the option to deduct State and local general sales taxes;
• the above-the-line deduction for qualified tuition and related expenses;
• and tax-free distributions from individual retirement plans for charitable purposes.
The additional 0.9% Medicare tax on wages and self-employment income and the 3.8% net investment income tax, which came into law in 2013, remain in effect for 2014.
Perhaps the most significant change for this year will be the tax provisions of the Affordable Care Act (ACA). Some of you may be receiving new tax forms this year as a result (Forms 1095-A, 1095-B, and/or 1095-C). Beginning in 2014, individuals and dependents are required to maintain a “qualified health plan” unless they meet certain exemptions; otherwise an excise tax may occur. The regulations are lengthy and cumbersome and we are here to address any questions or concerns you may have regarding your particular situation.
The Service also issued final tangible property capitalization regulations. The final regulations address the proper characterization and tax treatment of expenses related to maintenance, repairs, and improvements. The final regulations provide a “de minimis safe harbor” rule for taxpayers. These final regulations generally apply to tax years beginning on or after January 1, 2014 and we will evaluate requirements with those of you affected. Please do not hesitate to contact us if you have any questions or concerns as you begin working on your tax information this year.
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