My colleague Dan Guertin, Esq. wrote earlier this month about some tax changes for the 2015 tax season for 2014. In this article, I will discuss some other changes. First, I'll start with what is perhaps the most sickening display of Newspeak too Orwellian for even Orwell to imagine.
Obamacare Tax
2015 is the first year when health insurance reporting is required directly on tax returns. If you and all members of your family had minimum essential coverage during the year, the only thing you would need to do is check the box on line 61 of your tax return. If any of your family members did not have the coverage during any part of the year, you might need to calculate and pay the tax called the get ready for what our friend Dottie above can't even digest: The “Individual Shared Responsibility Payment." Wow. That is even difficult to type. Well anyway, if any of you applied for insurance subsidies, or you want to claim a coverage exemption, you will need to attach some special IRS forms to your tax return. The maximum amount of tax to be paid for in compliance with the rules is 1% of your total household income.
Updated Property Capitalization Rules
If you have a business that involves property ownership, you will most likely be affected by the new Regulations recently announced by the IRS. What the agency implemented is a change in the way property expenses can be claimed on a tax return. Only certain property expenses will now be allowed to be directly deducted, while others will have to be capitalized (depreciated over time). Some taxpayers might have to attach a special IRS form to their 2014 tax return. The new rules are not straightforward, and professional tax assistance on this matter is highly recommended.
Tax Extenders Bill Signed Into Law
In case you heard Congress was about to disallow certain deductions and credits, the law extending the allowance of certain tax-breaks remained in force for 2014. The examples of such tax breaks include tuition and fees deduction, bonus depreciation, state and local general sales tax deduction and many others. So this is a good thing.
Net Investment Tax and Additional Medicare Tax: Second Year of Enforcement
And I'll finish with something that isn't brand new, but is just awful. Simply awful — and this too keeps Dottie, the Evil Pig of Death, Destruction, and Parking Meters in a constant state of agitation. This would be the second year in which certain taxpayers might be subject to additional taxes on their investment, business income or wages. Just to remind you: if your filing status is single and your Adjusted Gross Income (AGI) is over $200,000 or it is married filing jointly and your AGI is more than $250,000, all your passive income that includes rental income would be subject to 3.8% Net Investment Tax. In addition, if your wages or business income were above these thresholds, you would be subject to a 0.9% Additional Medicare Tax on those.
