Tax Tips and Resources for 2014
Tax season is upon us yet again! Our clients often struggle with how to best prepare for their meeting with an accountant or with how to organize paperwork so that they can do their own taxes. This year, we’ve put together some tips and resources that we hope will make this process less painless. While we are not tax accountants or lawyers, we have gathered information directly from the IRS webpage and hope that this information will help with organizing your paperwork for a smoother filing process.
Deductions are always a big topic when it comes to taxes. Many people keep receipts throughout the year with the intention of itemizing their deductions to minimize the amount of income there are taxed on. However for most of us, the amount we can claim if we itemize will still be less than the standard deduction. What exactly is the standard deduction? According to the IRS (http://www.irs.gov/taxtopics/tc551.html), the “standard deduction is a dollar amount that reduces the amount of income on which you are taxed”. Before you go through the hassle and organization nightmare that are receipts, spend some time figuring out if it will really have the payoff you’re hoping for.
Updates for 2014
Home Offices – From the IRS bulletin in March (http://www.irs.gov/uac/Newsroom/Simplified-Option-for-Claiming-Home-Office-Deduction-Now-Available) Normally, home-based businesses are required to fill out a 43-line form (Form 8829) often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions. Instead, taxpayers claiming the optional deduction need only complete a short worksheet in the tax instructions and enter the result on their return. Self-employed individuals claim the home office deduction on Schedule C Line 30, farmers claim it on Schedule F Line 32 and eligible employees claim it on Schedule A Line 21.
Medical Deductions Increase – http://www.irs.gov/Individuals/2013-Changes-to-Itemized-Deduction-for-Medical-Expenses “Most people who itemize their deductions can claim deductions for un-reimbursed medical expenses, those which are not covered by health insurance, that exceed 10 percent of their adjusted gross income. Previously, the law permitted deductions for un-reimbursed expenses in excess of 7.5% of their adjusted gross income.”
Links for taxpayers
FAQ’s for your 2013 federal tax return – http://www.irs.gov/Individuals/1040-Central
Filing your taxes – http://www.irs.gov/Filing