Take the Uncertainty Out of Health Care Reform

If you’re not sure what the new health care law means to you, you’re not alone. A poll by the Kaiser Family Foundation revealed that just over a third of the public had tried to find out more information about the law—the Affordable Care Act—in recent months. About half of the respondents to the survey said they remain confused about the law and its provisions.

If you have questions we can provide the answers you need. Among other things, our individual clients should be aware of the Shared Responsibility Provision that becomes effective on January 1, 2014. Under the provision, people of all ages, including children, must either have minimum essential health coverage, qualify for an exemption or make a payment when they file their tax return. We can help you understand whether your coverage meets the law’s requirements, how gaps in coverage will be treated and what circumstances qualify for an exemption. Contact us today to find out how the health care law will affect you.

 

©2014AmericanInstituteofCertifiedPublic Accountants.Allrightsreserved.

Keep Your Records Safe in Case Disaster Strikes

Some natural disasters are more common in the summer. But major events like hurricanes, tornadoes and fires can strike any time. It’s a good idea to plan for what to do in case of a disaster. You can help make your recovery easier by keeping your tax and financial records safe. Here are some basic steps you can take now to prepare:

1. Backup Records Electronically. Many people receive bank statements by email. This is a good way to secure your records. You can also scan tax records and insurance policies onto an electronic format. You can use an external hard drive, CD or DVD to store important records. Be sure you back up your files and keep them in a safe place. If a disaster strikes your home, it may also affect a wide area. If that happens you may not be able to retrieve your records.

2. Document Valuables. Take photos or videos of the contents of your home or business. These visual records can help you prove the value of your lost items. They may help with insurance claims or casualty loss deductions on your tax return. You should store them with a friend or relative who lives out of the area.

3. Update Emergency Plans.  Review your emergency plans every year. Update them when your situation changes. Make sure you have a way to get severe weather information. Have a plan for what to do if threatening weather approaches.

4. Get Copies of Tax Returns or Transcripts. Visit IRS.gov to get Form 4506, Request for Copy of Tax Return, to replace lost or destroyed tax returns. If you just need information from your return, you can order a free transcript online or by calling 800-908-9946. You can also file Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript or Form 4506-T, Request for Transcript of Tax Return.

5. Count on the IRS.  If you fall victim to a disaster, know that the IRS stands ready to help. You can call the IRS disaster hotline at 866-562-5227 for special help with disaster-related tax issues.

Visit IRS.gov to get more about IRS disaster assistance. Click on the ‘Disaster Relief’ link in the lower left of the home page. You can also get forms and publications anytime on IRS.gov. To get them in the mail, call 800-TAX-FORM (800-829-3676).

 

**This message was distributed automatically from the IRS Tax Tips mailing list. For more information on federal taxes please visit IRS.gov.

Did You Hire a Veteran Prior to Jan. 1, 2014?

The Work Opportunity Tax Credit offers employers a tax credit for hiring members of certain groups, including many veterans and those who have received vocational rehabilitation. The maximum credit can be as high as $9,600, depending on the employee, but it only applies to hires who begin work before January 1, 2014.

Tax credits are a dollar-for-dollar reduction in your tax bill, so they are well worth taking advantage of. Your company may be eligible for many credits or deductions that can lower your tax outlay. Are you making the most of all of them? Contact us today to discuss the best ways to minimize what you’re paying.

 

©2014AmericanInstituteofCertifiedPublic Accountants.Allrightsreserved.

Will You Pay Higher Taxes on this Year’s Return?

Recent tax laws have increased the highest income tax rate for individuals, raised the dividend income and long-term capital gains tax rates for wealthier taxpayers and made planning for the alternative minimum tax a little more complicated for some people. At the same time, those who run their own shops also had to pay a higher self-employment tax beginning in 2013. And those are just a few of the changes that could hike the amount you will owe to Uncle Sam with this year’s tax return. If you find yourself facing a bigger tax bill, we can help. There are many strategies that can minimize your tax outlay and enhance your overall financial situation. Contact us for the kind of personalized, expert advice that will help put you on a sound financial footing.

 

©2014AmericanInstituteofCertifiedPublic Accountants.Allrightsreserved.

How Will the End of Some Popular Credits and Deductions Affect Your Business?

Did you know that bonus 50% first-year depreciation will no longer be available to your business in 2014 and beyond? And that the Section 179 expensing limit, which allows you to deduct qualified costs immediately instead of expensing them over time, will tumble to $25,000 from $500,000, where it’s been for the last four years? These are just a few of the changes that businesses should prepare for this year. While many tax rules are permanent, others are written to expire at some point in the future. Some are extended and given new deadlines, but a significant number of popular “extenders” terminated at the end of 2013, including both business credits and deductions.

How will the end of these and other credits or deductions affect you? And what other tax law changes could have an impact on your company finances? Contact our office to find out the answers. We can offer the advice and planning recommendations you need to minimize your tax bill and enhance your business’s financial situation.

 

©2014AmericanInstituteofCertifiedPublic Accountants.Allrightsreserved.

The End of the Line for Some Popular Credits and Deductions

Did you know that while many tax rules are permanent, others are written to expire at some point in the future? These expiring items are often granted a temporary extension, but a significant number of popular “extenders” terminated at the end of 2013, including both credits and deductions. A number of credits for qualified energy home improvements and appliance purchases will no longer be available, along with the credit against health insurance premiums previously granted to certain taxpayers. Teachers will no longer be able to take the $250 deduction for out of pocket classroom supply purchases, and the deduction for qualified tuition and related expenses is set to disappear.

How will the end of these and other credits or deductions affect you? And what other tax law changes could have an impact on your finances? Contact our office to find out the answers. We can offer the advice and planning recommendations you need to minimize your tax bite and enhance your overall financial situation.

 

©2014AmericanInstituteofCertifiedPublic Accountants.Allrightsreserved.

5 Things You Didn’t Know About Health Savings Accounts

HealthcareHealth care costs may not be increasing at the same pace as in prior years, but costs for most people have not gone down. One solution for finding more affordable health coverage, especially for those who do not qualify for the refundable premium tax credit or Medicaid, is using a health savings account (HSA). It combines a high-deductible health plan (HDHP) with an IRA-like savings account. The tax savings from deductible contributions help defray the overall cost of health coverage. And there’s no tax on withdrawals to pay qualified medical expenses.

  1. HSAs can satisfy the individual mandate. Those seeking to comply with the individual mandate under the Affordable Care Act can consider using health savings accounts. HDHPs being sold today meet minimum essential coverage under the Affordable Care Act. Typically, they are bronze plans available through a government exchange or from a private insurer.
  2. Deductible contributions don’t require itemizing. Contributions you make to HSAs are deductible from gross income. They do not require any itemizing. However, you have to file Form 1040 and cannot use Form 1040A or 1040EZ.
  3. Unused savings carry over. If you don’t use up your annual contributions, then the unused amounts, plus any earnings on them, carry over indefinitely. They can be used in the future for qualified medical expenses, even if you are no longer covered by an HDHP at that time. And when you die, unused funds can be rolled over to a surviving spouse who can use the account for his/her own purposes.
  4. Contribution limits are rising. The deductible contribution limit for 2014 is slightly higher than 2013, and the limits for 2015 will also be higher than in 2014. Here are the deductible contribution limits:
    2014 2015
    Self-only
    coverage
    $3,200 $3,250
    Family coverage $6,550 $6,650

    Those covered by an HDHP who are at least age 55 by the end of the year can add another $1,000 to their HSAs.

  5. HSAs are barred to those 65 and older. Once you qualify for Medicare, you cannot make any further tax- deductible contributions to HSAs. However, you can continue to use the funds built up in your account. What’s more, if you tap the money for nonqualified expenses, you won’t be penalized (those under age 65 pay a 20% penalty on nonqualified withdrawals). But you will pay tax on the distribution if it isn’t used for medical expenses.

Conclusion

HSAs offer important advantages for addressing health care coverage. Take the time to explore this option before deciding on your 2015 coverage choice.

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