Our year-end letter will be coming out in December to give you more information about tax changes for this year. We are still waiting on Congress to act or not act on many expired tax extenders. The most notable items for businesses are the bonus depreciation deduction and increased limits for immediate write-off of equipment and similar assets.
The single-most talked about new item on the personal side relates to the Affordable Care Act that fully kicks in this year (2014). Everyone will be impacted by this and will be required to report at least whether or not minimum essential coverage was obtained for the year. Many different scenarios can result from this legislation. Many qualify for credits to help pay for insurance and some will have to pay a penalty for not obtaining coverage. There are several tax planning options related to this topic in terms of reducing or eliminating the penalty. Contributing to a Traditional IRA is one way to reduce your penalty in addition to lowering business income, deducting student loan interest, moving expenses if you qualify, deducting capital losses, and many others. If you do qualify for premium assistance and you purchased your health insurance through the online marketplace, there are several opportunities for you to maximize the credit which is refundable.
Several exemptions exist for those who do not have minimum essential coverage. There are exemptions for lower-income taxpayers, those who participate in a health-care ministry, among others.
Kansas has a few changes in store for us. A slightly lower tax rate and further limitations on itemized deductions are the highlights.
If you have any questions about your individual tax situation please contact us today to find out how you can minimize your tax or maximize your refund.