Tax Information at your finger tips……

1040closesmall

We will endeavor to provide new and continuing changes to the tax laws that would affect many of our clients.

Standard Deduction:

The standard amount you can deduct from income if you don’t itemize your deductions is $6,200 ($12,400 for married couples filing jointly, or $9,100 if you file as head of household).

Personal Exemption:

The personal exemption for 2014 is $3,950, up from $3,900.

Earned Income Credit:

If you have no children, your maximum Earned Income Credit for 2014 is $496. With two children, the maximum amount is $5,460, and with one child, it is $3,305. If you have three or more qualifying children, the maximum Credit you can receive for 2014 is $6,143 (up from $6,044 in 2013).

Alternative  Minimum Tax:

The Alternative Minimum Tax (AMT) exemption amount rises in 2014 to $52,800 ($82,100, for married couples filing jointly).

Limitation of Itemized Deductions:

If you have a high adjusted gross income, you may not be able to take all your itemized deductions, thanks to the Pease provision. Itemized deductions start to phase out at $152,525 if you are married filing separately ($254,200 for individuals, $279,650 if head of household, or $305,050 if filing jointly). Your itemized deductions are reduced by 3% of your adjusted gross income over these amounts, but they are never reduced by more than 80% of your otherwise allowable deductions.

The Affordable Care Act:

Changes for 2014 include the addition of the Health Insurance Premium Tax Credit (see below) and the Individual Shared

Health insurance Premium Tax Credit:

If individuals or families purchase health insurance through the Health Insurance Marketplace, they may qualify for the new Health Insurance Premium Tax Credit. To qualify for the credit, your household income must fall between 100 percent and 400 percent of the federal poverty line, you may not be claimed as a dependent on any other taxpayer’s return, and (if married), you must file jointly. In the case of spousal abuse or abandonment, this requirement may be waived.

Individual Shared Responsibility Provision:

In 2014, each individual taxpayer must carry the required “minimum essential coverage” each month, qualify for an exemption, or pay mandatory taxes. For those facing this new penalty, relief provisions have been written into the tax laws to help taxpayers transition into these new requirements. The minimum amount of insurance coverage you must carry is calculated per family member and then added together

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