Where O' Where is my tax refund?
As I was sitting at home enjoying the snow day that was offered to me compliments of my job, I received an email with some very interesting information. Normally, when I receive these messages they are accompanied with a joke of some kind, and who has time for that? Any who, once I started reading the message I became very intrigued with the informational content. To think that because of a shutdown now we may have to suffer. Well I won't go into deep details, you will have to read it for yourself.
Now, for the parts that were important to me, I highlighted them in a different color. Let me know your thoughts. Also throughout the article I will add my $0.02 if it matters. Hold on to your tax refund inquiring seats ladies and gentlemen here we go. . . . the piece was entitled, "New Tax Traps to Watch out for in 2014. Honeee, this one was a doozie.
Article provided by: SJS Financial Firm - Sharif J. Small, President & CEO
(sjsmall@sjsfinancialfirm.com - www.sjsfinancialfirm.com
_____________________________
_____________________________
Taxpayers can ring in 2014 knowing that they don't have to
wait on Congress to finalize tax laws affecting their 2013 returns. The
American Taxpayer Relief Act of 2012 that was finally enacted on Jan. 2, 2013,
made many tax laws permanent and extended other provisions through 2013. But the
tax-related celebrations are likely to be short-lived. Here are some tax traps
you need to watch out for in 2014.
Get ready to wait early in the year. So because everybody could not play together in the sandbox of politics, now we have to suffer?
The federal government shut down for 16 days last October,
but taxpayers are still paying for it. The IRS says Jan. 31, 2014, is the
earliest it will be ready to process individual tax returns. That date might
even be pushed back to Feb. 4 in order for the agency to complete system
updates and tests, which were interrupted by the shutdown. The IRS promises to
make an official announcement of the filing season start date as soon as it
knows for sure. You can go ahead and submit your return electronically as soon
as you're ready; your e-filer will hold it until the IRS is ready to accept
returns. If, however, you file a paper return, the IRS encourages you to wait
until Jan. 28 (or later) to mail it.
Get ready to wait later in the year.
Every year or so, some temporary tax provisions are renewed
by Congress. In recent years, however, lawmakers have let the laws expire and
then renewed them retroactively, most recently in the American Taxpayer Relief
Act of 2012, also known as the "fiscal cliff" tax bill. Expect a
replay in 2014. Fifty-five tax provisions expire on Dec. 31, 2013. This doesn't
affect your 2013 tax return, but tax planning for 2014 will be a different
story. Consideration of extenders has been complicated by possible overall tax
reform and budget considerations. Uncle Sam could bring in billions by letting
some or all of the extenders fade away. That would mean, however, that
individual taxpayers would lose such popular tax breaks as the itemized
deduction for state and local sales taxes, the above-the-line deductions for
tuition and fees and educators' out-of-pocket classroom expenses. The consensus
is that Congress will take up the extenders in 2014, but whether that will be
before or after the Nov. 5 midterm election is unclear. The longer lawmakers
wait, the harder it will be to plan and implement your 2014 tax strategy.
Sign up for medical insurance to Avoid Tax Penalty. I have always found this interesting, even for those that cannot afford it you are STILL going to penalize them for not having the money? Interesting.
The Affordable Care Act will continue to roll out in 2014,
meaning that uninsured individuals have some choices to make that could have
tax implications. Enrollment for health insurance under Obamacare, as the
health reform act is popularly known, goes through March 31, 2014. If you don't
buy an insurance plan, you could face a penalty. The charge for 2014 is either
1 percent of your yearly household income or $95 per uninsured adult and $47.50
per child, up to $285 for a family. You pay whichever amount is higher. If you
get insurance for part of the year, your penalty will be prorated. You'll pay
the penalty when you file your 2014 tax return in 2015. If you're getting a
refund, the IRS will subtract your ACA penalty from the amount you were to get
back. If your refund isn't large enough to cover the penalty, the IRS will send
you a bill. Ignore that and the tax agency will take the amount out of future
tax refunds.
WOOO HOOOO!!! File jointly if you're a same-sex married couple.
Married same-sex couples now have the same federal tax
filing responsibilities as heterosexual couples. Following the Supreme Court
invalidation of the Defense of Marriage Act, the IRS instructed same-sex
married couples to file jointly or as a married couple filing separately even
if the state where they live does not recognize their marriage. This will
simplify same-sex couples' federal filings, but if they must pay state income
taxes, depending on their state's law, they could still face filing two state
returns as single taxpayers.
Claim the simplified home office deduction. Surely wish I could write off those pens?
The recession has prompted many workers to start their own
businesses, many of which are run from their homes. There's good filing news
for these entrepreneurs. For 2013 returns filed in 2014, the IRS is now
offering a simplified home office deduction. The new optional deduction is $5
for each square foot of home office space, up to a maximum of 300 square feet.
That comes to a maximum $1,500 annual home office deduction. The IRS estimates
that this option will save home-office filers who claim it's an estimated 1.6
million hours of paperwork and record keepings collectively. Instead of filling
out Form 8829, you'll use a worksheet in the Schedule C instruction book and
enter your simplified home-office deduction amount on Schedule C. While the new
deduction option will be welcomed by many, note that the requirements to
qualify as a home office still apply. For instance, the office space must be
used regularly and exclusively for business.
Comments
Post a Comment