2014 Tax Law Changes
Social security wage ceiling, The maximum amount of your earned income on which you pay Social Security tax is now $117,000. When you reach that amount with one employer, they should stop withholding Social Security tax from your pay until the following year. If you work for more than one employer, and your total earnings are more than $117,000, We will calculates a credit for any overpayment of Social Security taxes.
Foregn earned income exclusion, If you qualify, you can exclude up to $99,200 of your foreign earned income from your taxable income for 2014. If you and your spouse both work in a foreign country and meet the qualifications, you may each be able to exclude up to $99,200.
Adoption credit, You may qualify for a credit equal to up to $13,190 of your adoption expenses. If your employer provides adoption benefits, you may also be able to exclude up to the same amount from your income. Both a credit and exclusion may be claimed for the same adoption, but not for the same expense. The credit is now permanent and indexed to inflation.
Homeowners cancelled debt exclusion, The canceled debit exclusion provides tax relief on canceled debt for many homeowners involved in the mortgage foreclosure crisis. You may exclude up to $2,000,000 ($1,000,000 if married filing separately) of canceled qualified principal residence indebtness from taxable income.
Mortgage insurance premium, You may be able to deduct qualified mortgage insurance premiums, also known as private mortgage insurance (PMI), you paid on a home as an itemized deduction. This amount may be reported in Box 4 of Form 1098.
Standard deduction, The standard amount you can deduct from income if you don't itemize your deductions is $6,200 ($12,400 for married couples filing jointly, or $9,100 if you file as head of household).
Personal exemptions, The personal exemption for 2014 is $3,950, up from $3,900.
Alternative minimum tax, The Alternative Minimum Tax (AMT) exemption amount rises in 2014 to $52,800 ($82,100, for married couples filing jointly).
Earned income credit, If you have no children, your maximum Earned Income Credit for 2014 is $496. With two children, the maximum amount is $5,460, and with one child, it is $3,305. If you have three or more qualifying children, the maximum Credit you can receive for 2014 is $6,143 (up from $6,044 in 2013).
American opportunity tax credit, The American Opportunity Tax Credit expanded on the Hope Credit. The income limits are higher, the credit is available for more qualified expenses, and you can use the credit for four years of post-secondary education instead of just two. In addition, you can even get a refund if you don't owe any tax for up to 40% of the credit ($1,000).
Tuition expense deduction, You can still deduct tuition expenses as an adjustment to income, even if you don't itemize your deductions. You generally take the tuition expense deduction if you don't qualify for an education credit or other tax break for the same expenses.
The affordable care act- obama care, Changes for 2014 include the addition of the Health Insurance Premium Tax Credit (see below) and the Individual Shared Responsibility Provision. The majority of taxpayers will see minimal impact on their 2014 federal taxes. For more information, www.coveredca.com .
Health insurance premium credit, If individuals or families purchase health insurance through the Health Insurance Marketplace, they may qualify for the new Health Insurance Premium Tax Credit. To qualify for the credit, your household income must fall between 100 percent and 400 percent of the federal poverty line, you may not be claimed as a dependent on any other taxpayer's return, and (if married), you must file jointly. In the case of spousal abuse or abandonment, this requirement may be waived.
Standard mileage rates, The standard mileage rate for the use of your car or other vehicle dropped half a cent to 56 cents per mile for business and 23.5 cents per mile driven for medical or moving purposes. The rate for charitable travel remained the same at 14 cents per mile