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Monday, May 5, 2014

Will I pay more taxes in 2014?

Every government program requires funding.  How does the government pay for these programs?  Taxes!  With the introduction of the Affordable Care Act came a series of tax law changes to pay for this program.  Following is a partial list of what to expect in 2014:

·         Additional Medicare Tax for certain high earners ($200,000 for single, $250,000 for MFJ)
·         Net investment income tax on interest income, dividends and other passive income for certain high earners ($200,000 for single, $250,000 for MFJ)
·         Increased threshold on medical expense deductions from 7.5% of AGI to 10% for most taxpayers
·         Phase out of personal exemptions deduction on taxpayers with AGI greater than $150,000
·         Phase out of itemized deductions on taxpayers with AGI greater than $150,000
·         Elimination of the deduction for state and local sales taxes
·         Elimination of the above-the-line deduction for qualified tuition expenses
·         Elimination of tax-free distributions from individual retirement plans for charitable purposes
·         Elimination of certain above-the-line educator expenses of elementary and secondary school teachers
·         Elimination of discharge of indebtedness on principal residence excluded from gross income
·         Penalty assessment for individuals without health insurance coverage
·         And more!

What can you do?  Contact your CPA to schedule an appointment for 2014 tax projections to see how you can prepare for this.