Tag Archives: Internal Revenue Service

What Does Obamacare Mean For Your Tax Future?

Obamacare TaxesThe implementation of the Affordable Care Act continues to move forward. Failing to adjust withholding strategies and medical expenditures may result in added tax liability. What do the increased cost of healthcare and decreased deductions mean for you and your family? Here are some of the most significant changes to tax laws under the Affordable Care Act.

Higher Taxes on Investment Income

If you derive a significant percentage of your income from investments, you can expect somewhat higher taxes for the 2013 fiscal year. This typically applies to individuals who earn more than $200,000 and married couples who make over $250,000 jointly. Most other investors and taxpayers will see little or no change in the rate of taxation for their income-producing investments.

Upper Income Brackets Will See Medicare Tax Increases

Payroll taxes are often overlooked by individuals when considering their overall tax liability. Since these taxes are taken out of paychecks before workers receive them, changes in these rates can easily go unnoticed. However, couples who earn more than $250,000 jointly may get an unpleasant surprise at tax time: An increase in Medicare hospital taxes of nearly one percent may not be withheld by employers who are unaware of the joint income levels of the married couple. High-earning married couples may be responsible for any amount due that is not withheld as payroll taxes.

Reduced Deduction Percentages for Medical Expenses

Prior to the implementation of the Affordable Care Act, individuals could deduct their medical expenses if those expenses reached 7.5 percent of their adjusted gross income. That figure has now risen to 10 percent, reducing the availability of these deductions for rich and poor alike.

Changes to Flexible Spending Accounts

For 2013, only the first $2,500 deposited into flexible spending accounts (FSAs) will be tax-free. All other deposits will be liable to the regular tax rates applied to other earned income. As a result, many firms are now implementing limits of $2,500 on FSAs to eliminate the need for specialized W-2 forms and to protect their employees against potential financial liabilities when tax time rolls around once more.

New Taxes on Durable Medical Goods and Devices

The Affordable Care Act requires a new excise tax on medical devices including braces, gloves, pacemakers, nebulizers and many other items of medical equipment. While this new tax will not affect patients directly, it is likely to increase the costs of these items and may shift a greater percentage of the financial burden for advanced systems to the private individual as medical supply companies adjust their rates to make up for these added costs.

What You Can Do

Making the necessary changes to withholding, FSA contributions and other healthcare-related activities can help consumers manage the new requirements of the Affordable Care Act and can provide an added level of defense against increased taxes and reduced services in the medical arena. Make sure you consult with experienced and qualified tax experts who can advise you on the latest tax-related changes and help you navigate them.

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The Best Tax Tips For Your Business

Small business owners know that taxes can be confusing. This is true whether you have filed for several years now, or this is your first year in business. The laws change from year to year, and making sense of the federal tax laws is nearly impossible for anyone except an accountant or an attorney. If you are not careful, you could end up paying far more than you really owe. You could also end up paying too little, which will cause complications with the IRS later. In this article, we will look at some of the most important tax tips to consider and use so you are ready for your taxes.

Keep Track of the Expenses  

It is extremely important that you keep track of all of your expenses throughout the year. You should use software and apps to log each of these expenses and have a central database where you can gather all of them. Keep them sorted by different criteria including type of expense, date, and overall cost. The more detailed the notes, the better. Another tax tip is to make sure you create a backup of your files, so you do not lose them. Keeping the information in the cloud can be a great way to make sure you can always access it from anywhere. Check this recent article to find out some fresh 2014 tax tips

Deductions

Many small companies are unwittingly paying too much for their taxes because they are not taking advantage of all of the deductions they could and should take. These deductions are legal, and you should use them whenever appropriate. Some of the various types of deductions you could use include meals, travel, entertainment, and even health insurance. Just make sure you keep track of those expenses and keep your receipts so you can prove that they are related to your business if necessary. This tax tip makes things easier when it comes to filing. In some specific countries there is very low to zero tax rate, one of the is the BVI or the British Virgin Islands, which is an option to consider in case you pay a lot of taxes. Check this article here about the BVI tax company benefits

Another deduction that many companies are not using is for equipment. Since 2011, small businesses can deduct up to half a million dollars in equipment purchases, as well as equipment repairs. However, the catch is that the business must spend two million dollars or less on equipment for the entire year. Still, for many small businesses, this tax tip could be a huge and beneficial deduction.

Insurance for Employees

Small businesses that have employees and that offer coverage may be able to take the small business health care tax credit. The requirements for eligibility can sometimes be difficult to parse through, so talking with an accountant or an attorney about the matter is a good idea.

Charity Deductions

Just as individuals can reduce their taxes based on their charitable donations, businesses can do the same. When your business donates goods and services, it is possible to deduct the dollar amount or valuation of the items from the taxes.

These tax tips are things you should keep in mind all year long so you can save on your taxes. Make sure you get into contact with a professional when it comes time to go over and file your taxes, just so you can be sure you aren’t paying too much.

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TurboTax 2014 Comes With Personalization For Returning Users

Recently, TurboTax unveiled a new personalized experience for returning users. Starting with TurboTax 2014, users will now see personalized settings and information unique to themselves. This means that anyone filing their 2014 taxes can take advantage of this new system. However, personalization will only work for taxpayers that used the service back in 2013, too.

TurboTax 2014

MeeMix (Photo credit: Wikipedia)

By using data from last year’s return, Turbo Tax 2014 will make the entire process faster. Data from last year is automatically entered into the new year’s return. The software will then focus upon specific sections of the return, based upon each user’s situation. During the process, sections deemed irrelevant to that taxpayer will be ignored. Taxpayers can still navigate through each section themselves.

For refunds, TurboTax 2014 will now explain a person’s refund in-depth. This includes how the numbers are calculated and what changed from the previous year. This gives users a great insight into their tax situation compared to last year. Likewise, answers to questions are available at the click of a button. Taxpayers won’t feel left in the dark about their taxes or their return.

If you’re filing your 2014 taxes and used Turbo Tax last year, then you need to do the same thing this year. This new personalized experience speeds up the process and makes everything more simple. Detailed explanations are a welcome addition to TurboTax 2014 for many taxpayers.

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Start Filing Your Returns With TurboTax 2014

Start Filing Your Returns With TurboTax 2014

Get Your Refund Early by Filing Your Returns Early: E-filing with TurboTax 2014 to Start on Jan. 2

Now that the IRS has set January 31, 2014 as the commencement date for processing tax returns, taxpayers are urged to start filing early. You can now get free TurboTax 2014 version from www.turbotax.com and start filing your returns from the 2nd day of January, 2014. The sooner you file your taxes, the sooner you will get your tax refund.

TurboTax 2014

Tax Refund Ballerz (Photo credit: bornazombie)

The average American taxpayer claims around 3,000 dollars in tax refunds. Furthermore, 8 in every 10 taxpayers in the country claim a refund every tax season. Intuit is encouraging taxpayers to start filing their returns at the soonest possible time to avoid delays in processing their tax refund.

Since TurboTax will start accepting e-files earlier than the IRS, the company will hold the information safely and forward them to the revenue service in a first-in, first out basis. This will go a long way in ensuring that taxpayer’s refunds are processed and sent back without delays, and it is important to note that the IRS does not anticipate any delays in doing this. The agency expects to perform as it did in the 2013 tax season; where 90 percent of all refunds were made in less than 21 days.

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Voting For Big Game’s Final Four In Last Days

Voting For Big Game’s Final Four In Last Days

turbotax

The clock is ticking, the game is almost over, and it is down to the final four. People around the world are in the final days of selecting the winner of Intuit’s Small Business Big Game competition. On Feb. 2, 2014, Intuit, the home company of TurboTax Canada, will make one small business a star in the biggest commercial game of the year.

Having an opportunity for its chance in the spotlight on Super Bowl Sunday are Barley Labs of Durham, North Carolina; Dairy Poop of Nampa, Idaho; GoldieBlox of Oakland, California; and Locally Laid Egg Company of Duluth, Minnesota. The four were among the thousands of small companies who entered the competition. The thousands were narrowed to 20, then to four. A worldwide vote determines which small business has an unprecedented opportunity for success. One vote per person per day will give one small business a chance at huge success.

TurboTax Canada

Super Bowl Tourney1 (Photo credit: Wikipedia)

Intuit and TurboTax Canada are awarding a prime 30-second commercial during the Super Bowl to the contest’s winner. The worldwide voting is in its final days, and four lucky small businesses are in the position to win big with Intuit and TurboTax Canada. Voting ends at 11:59 p.m. PST on Dec. 1.

The winner will receive a professionally produced 30-second television commercial during the biggest game of the year with TurboTax Canada and Intuit paying for the advertisement as well as purchasing the commercial time during the game. Voting is at . Small businesses are the heart and strength of the worldwide economy. Intuit, TurboTax Canada and voters are giving one small business a very big chance. You can get in on the game.

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Tax Help 101: Casualty, Disaster, And Theft Losses

Tax Help 101: Casualty, Disaster, And Theft Losses

Internal Revenue Service (Photo credit: LendingMemo)

You never know when problems can occur, and this year people have experienced their fair share of unexpected problems.  This summer alone people across the country are dealing with blazing wildfires, destructive storms with dangerous winds, and other natural disasters.  Some people are lucky and come out of the damage relatively unscathed, but others aren’t as fortunate.  Some people have had significant damage done to their property, and they’re trying to find a way to rebuild.  There are also some people that aren’t dealing with disasters caused by nature, they’re dealing with problems caused by other people. Theft of expensive objects, damage done by vandals, blackmail, and other problems happen to people every day.

Many people don’t know what to do when disaster occurs. People with insurance may be able to get some help from their policy, but some policies don’t have enough coverage to completely compensate the policy holder for their loss.  Luckily for tax paying American citizens, Uncle Sam has measures in place to help people in their hour of need. Financial losses incurred because of casualty, disaster, and theft losses may be tax-deductible. Tax payers can report casualty and theft can be reported on Form 4684 and Form 1040 Schedule A.

Casualty Losses

A casualty is defined as the loss, significant damage, or destruction of property because of a sudden event.  In order to claim property as a casualty cost, the event that caused it must be easily identifiable and unexpected.  Natural disasters like floods, earthquakes, storms, and wildfires fit the criteria, but Mother Nature doesn’t have to be the only cause of your loss.  Losses due to car accidents, terrorist attacks, and vandalism can all be claimed as a casualty loss.

Theft Losses

The IRS’ definition of theft isn’t too different from what law enforcement officials view as theft of property.  The IRS defines theft as “the taking and removing of money or property with the intent to deprive the owner of it. The taking of property must be illegal under the law of the state where it occurred and it must have been done with criminal intent.”  According to the IRS embezzlement, robbery, blackmail, burglary, extortion, larceny, and even kidnapping for ransom all full under the umbrella of theft losses.

Losses You Can’t Claim

The government offers IRS tax help to taxpayers that have experienced hardship, but there are some situations where you won’t be able to claim the property and finances you lost over the year.  Property that was misplaced cannot be claimed as a loss, nor can property that was accidently broken.  Tax payers may also not claim any property that has gone through progressive deterioration.  In order to be tax-deductible the damage must be cause by a sudden and unexpected event.  As an example, if your home was significantly damaged in a storm you would be able to claim that.  If your home was damaged because of termite infestation or mold over a period of time, you would not be allowed to claim that.

*Not a solicitation for legal services*

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