January 30, 2015
It’s that time of year again – tax season. Every year seems bring new changes as well as new frustrations. We’ve highlighted three things you’ll want to be aware of in 2015. And, as always, if you need further assistance, a quick search on our web site will provide you with a list of TrustDALE-verified businesses.
Affordable Care Act
If you did not have health care coverage in 2014, you may be subject to a tax penalty when you file this year. If this happens, the amount of your refund will be reduced or you will owe more on your taxes, depending on your situation. You may be penalized with a flat fee or a percentage of your income. It just depends on which is greater. There are some exemptions built into the ACA, which you can read more about here: www.healthcare.gov/fees-exemptions/hardship-exemptions/.
IRS Budget Cuts
Yes, the IRS is experiencing budget cuts. And yes, that means you will be experiencing longer wait times when it comes to processing your refund. Additionally, of the 100 million calls the IRS will receive, only about half of those will get answered. If you’re lucky enough to get through, expect to wait about half an hour to actually talk to someone.
Here’s some good news. President Obama’s recent proposal to tax distributions on 529 plans (an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs) was quickly shot down. If you don’t have a 529 plan, January is a great time to start one. You’ll have the entire year to save money. Additionally, the earnings in a 529 are tax free, plus you get a state income tax deduction if you contribute to a 529 plan. Learn more here: http://www.irs.gov/uac/529-Plans:-Questions-and-Answers.