Did you sign up for social security benefits last year? If so, you may have questions about how those payments are taxed on your federal income tax return.
Tuesday, March 31, 2015
Friday, March 27, 2015
Tuesday, March 24, 2015
Did you contribute to retirement plans or an IRA for 2014? You may be eligible for a federal income tax credit. The Saver's Credit can be taken when you make contributions to your traditional or Roth IRA as well as certain employer retirement plans. The amount you can claim varies, depending on your income, but can be as much as 50% of your contributions, up to a maximum credit of $1,000 ($2,000 if you're married filing jointly).
Friday, March 20, 2015
Owning foreign assets or having signature authority over certain foreign accounts means extra filing requirements. For example, Part III of Schedule B, the form where you report interest and dividends, has questions you might need to complete about foreign accounts and trusts. You may also need to file "Form 8938, Statement of Specified Foreign Financial Assets," with your income tax return. Other filings related to foreign assets include a form that must be filed electronically with the Treasury Department.
Wednesday, March 18, 2015
In the past, you may have chosen to reimburse your employees for health insurance premiums instead of establishing a group health insurance plan. Those payments were typically made as part of an employer payment plan and were generally tax-free. Under the Affordable Care Act, that treatment is no longer allowed. Instead, payments you make to employees so they can purchase their own health insurance are now considered taxable wages. Continuing with the former method could lead to penalties of as much as $100 per day per employee.
Wednesday, March 11, 2015
If you didn't have health insurance in 2014, or the insurance you had did not meet minimum requirements, you may have to pay a penalty on your 2014 federal income tax return - unless you qualify for an exemption. Exemptions include unaffordable coverage when premiums would have exceeded 8% of your household income, a coverage gap of three months or less, and general hardship. You can claim some exemptions directly on your tax return. However, for certain others be aware you may need to complete an application on the government insurance marketplace website.
Monday, March 9, 2015
The Tax Increase Prevention Act of 2014 revived 50% bonus depreciation for 2014 federal income tax returns. Bonus depreciation is available in addition to Section 179 expensing, and gives you the option of writing off up to 50% of the cost of certain new business assets. Unlike Section 179, you can claim bonus depreciation no matter the amount of your annual equipment purchases, as well as when your business reports a loss.
Wednesday, March 4, 2015
Did you purchase and begin using new or second-hand business equipment during 2014? Thanks to a year-end tax law extension, you can deduct up to $500,000 of your costs on your 2014 federal income tax return. The $2,000,000 overall limit was also reinstated, meaning your deduction is reduced when your annual equipment purchases exceed that amount.
Monday, March 2, 2015
IRS Commissioner John Koskinen has informed taxpayers that the Agency's level of service to taxpayers is likely to decline, thanks to increased workloads resulting from the Affordable Care Act and cuts to the IRS's 2015 budget. Taxpayers can expect longer waits in IRS responses to both written inquiries and phone calls. Refunds may also be delayed this year. The IRS will also have fewer resources to conduct audits, which may lead to lower revenue collection.