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2014 Tax Tips

  • You must have heard or read about the Affordable Health Care act, let’s talk about the impact of this act on your individual tax returns.
    Many folks in the bay area should be prepared to see their tax bills go up due to additional taxes introduced to pay for the affordable health care act.
    An Additional Medicare tax of 0.9% on individual wages and a new Net Investment Income Tax at a rate of 3.8% on certain net investment income of individuals, estates and trusts that have income above the statutory threshold amounts have been introduced.
    The threshold amounts for both these taxes are similar that is $250,000 for married taxpayers who file jointly, $125,000 for married taxpayers who file separately and $200,000 for all other taxpayers. You may be subject to both taxes, but not on the same type of income.

  • Get organized and look out for 2013 tax documents including cost basis from your brokerage company.
    Remember IRS gets a copy of all your tax documents. You may miss out on some information but IRS will not.
    Tax deadline is April 15 2014. I recommend filing taxes early, to get faster refunds, if you owe money payments can be scheduled for 2nd week of April.

  • As a reminder Foreign Account Reporting requires you to declare foreign assets worth more than $50,000, whereas FBAR requires you to declare all foreign financial accounts exceeding $10,000 at any time during the calendar year.

  • A Residential energy efficient property credit of 30% is available for installing qualified solar property. The best part is there is no AGI limitation and the credit can be used to offset AMT.

    If you would like to contribute to a greener planet, electric cars are the way to go and you also get a tax credit. How cool is that. The maximum credit allowed is $7500, but it’s not a refundable credit. So planning would be required.

    You can exercise the option of deferring part of your income to reduce your taxable bracket.

  • Non-working spouse can contribute to traditional IRAs, helping you reduce your taxable income.
    Children’s summer camps can qualify for deductions so plan ahead to take this advantage.

  • Beware of Tax Scams, scammers are getting smart they make caller ID appear as if the IRS is calling also Send bogus IRS emails to support their scam. The truth is the IRS won’t ask for payment using a pre-paid debit card or wire transfer.

  • Make sure to claim your HSA/FSA amount for the year 2013. Save all your tax documents and backup for atleast 5 years.

  • I take quality of my work and client satisfaction seriously. My firm went through a peer review, wherein an independent CPA reviewed my work. Similarly it is important to get your tax returns done by a professional CPA and have peace of mind.
    I provide complete solution to my clients by simplifying tax jargons, educating them about their returns; provide yearlong consultation, reply to IRS queries and notices.
    Importantly I personally work on my client’s tax returns they are not handed over to any other individual or firm.

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