Review your Withholding
Adjust for the impact of 2014. Now that you know the impact of 2014 tax laws on your current situation, make the necessary adjustments to your 2015 paycheck to account for your tax reality. File a new W-4 with your employer to make any necessary withholding changes.
2014 Tax Breaks that were not yet extended for 2015
- Teacher $250 deduction for qualified classroom expenses
- Deduction for state and local general sales taxes (in place of state income tax deduction)
- Deductibility of home mortgage insurance premiums
- Tuition and fees deduction
- 50% additional first year depreciation deduction
- Tax-free contributions from qualified IRAs for seniors age 70 ½ or over to charities
2015 Mileage Rates
The IRS announced mileage rates to be used for travel in 2015. The Business mileage rate increases by 1.5 cents while Medical and Moving mileage rates are lowered by one cent. Charitable mileage rates are unchanged.
Business Travel .575
Medical / Moving .23
Charitable Work .14
Start the year by setting up a mileage tracking logbook for each of your vehicles. Create a separate mileage log for each deductible activity you use during the year; business miles, charitable miles and medical miles.
For example, if you are a volunteer soccer coach and also drive for business, create two auto logs. Use one auto log for business miles and one auto log for charitable driving.
Health Insurance Required
If you are uninsured get insured. 2014 marks the first year you are required to pay a fee if you do not have qualified health insurance. In 2015, the fee goes up to $325 per uninsured adult ($95 in 2014) or 2% of your household income. If you paid the tax last year, get qualified insurance early in the year to avoid this fee.
Avoid the Extra Surtaxes
The numerous surtaxes added in 2013 will continue to impact many taxpayers. The surtaxes include; 39.6% income tax rate, phase-out of-itemized deductions, phase-out of tax exemptions, additional 0.9% Medicare tax and 3.8% investment surtax. If any of these tax laws impact your tax return in 2014, they will likely do so once again in 2015 unless you plan accordingly.
Please call with any questions on how this information may impact your situation.
