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Three 2014 Tax Laws You Need To Know

Every single year, the tax laws change which leaves lawyers and accountants with a headache. Laws are changed and loopholes are closed, meaning that last year’s methods may no longer work quite so effectively. Some tax changes will affect business, and some of them will affect us all.

The changes in 2013 seen a detrimental effect on the earning level of many tax payers, leaving many people with a much more difficult situation at home. Thankfully, the 2014 tax changes are less draconian, letting you concentrate more on living a better life.

These new tax rules will help you spend a little bit more as we are not losing quite as much as we used to thanks to tax changes. However, some tax payers are going to be struggling with the new penalties facing them, based on health insurance.

Deduction & Exemption Changes

Designed to accommodate the changes made by inflation, these new rules could help you save a bit of money in the long-term. These adjustments will, in theory, ensure that you are put into the right tax bracket and therefore receive the breaks that you should.

These changes could help you save as much as $200. Furthermore, single filers will also see significant benefits from the changes to the tax system. Further limits have been included for those receiving benefits or education credits.

Affordable Care Act

This is the biggest change in 2014, arguably. Anybody who employs more than 50 full-time employees will face a tax penalty, if they fail to provide the essential health coverage demanded by employees.

These penalties could be anything up to $100 per person, and by 2016 it could be as high as $695. However, businesses with fewer than 50 staff are eligible for tag exemptions and tax credits, providing they meet the minimum coverage requirements for their staff.

Medicare

With ObamaCare causing so much controversy in recent times, the introduction of FICA and Medicare tax hikes. The rates are changing dramatically based on your earnings and anybody who earns more than $250,000 a year will be paying roughly 2.35% tax to FICA and Medicare.

These costs are related to the unexpected increase of Social Security costs and growth. So while there is no tax increase this year, the wage base is increasing meaning that many people are paying more than they used as they now fall into the designated wage bracket.

As you can imagine, all of these problems bring associated rises in price to both businesses and individuals. If you are being affected by tax issues, then it is well worth looking into the ways it can be corrected. These tax law changes are going to affect most people, so be prepared for a few shocks – positive or negative – the next time you open your tax bill!

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