Understanding the rules for 2014 IRS tax depreciation, deductions, reimbursement, refund rules and or simply understanding the refund calculator can be tricky when taxpayers fill out the forms. Here is a guide in order to understand the rules for 2014 and proceed in the future making sound financial decisions. These rules apply 2014 through 2017, unless other changes are made in subsequate years. Those changes can be found at The IRS website – www.irs.gov. Otherwise, here are the changes thus far.
The Medical Deductions
The new changes to the deductions for 2014 add deductions for medical expenses. The schedule A on the 1040 allows tax payers to deduct 7.5 percent of medical expenses based on his or her adjust income. In order to help pay for Obamacare, taxpayers that are younger than 65, are able to deduct 10 percent of medical expenses, based on his or her adjusted income. Those taxpayers that are over 65 can deduct 7.5 percent of all medical expenses based on his or her adjusted annual income through 2016.
What qualifies as a medical deduction is based on the insurance program. Basically, it is everything that a taxpayer pays out of pocket for themselves and his or her dependents. This does not include expenses that the insurance company pays back to the taxpayer. While over the counter expenses might be covered later, these current medical expenses are the ones that qualify for tax deductions for 2014.
- All Medical Procedures
- All Medications
- All Therapies
- Dental Cleanings
- Dental Procedures
- Dental Visits
- Doctor Visits
- Long Term Care
- Medical Equipment
- Nursing Home Expenses
- Travel to and from Treatment
Those taxpayers that are self-employed can deduct his or her medical expenses as a business expense to save up to the amount which the given business makes a profit for in that year alone. Medicare premiums are completely deductible. That equals 100 percent of the cost for the premium.
Refund Rules and Deductions for Self-Employed
Even though those deductions seem excellent, taxpayers that make more than $100,000 in that given tax year can only deduct $500. This is not a good option considering the new law that takes effect in 2013 (see W-4 and W-9 forms) that requires that all self-emplyed people that have employees must cover those employees’ healthcare. Considering the fact that it isn’t tax deductible and that the taxes for the self-employed are going up, most small businesses will have hefty losses in 2014.
One exception to this is the allowance for “Heath Savings Accounts”. These are savings accounts that self-employed taxpayers can use for payment of medical expenses. They are funded by employees or themselves. These are deductible in 2014. This is something that the self-employed should take advantage of this eduction. Preparation for it is essential.
Adoption Tax Credits
Before, any taxpayer that doesn’t owe taxes during the year, can then claim up to $13,360 through the adoption credit. This year that tax exemption has expired. Other expenses with the new dependent can be used though through the “standard dependent deductions.” These remain the same for the 2014 tax year.
The changes for the 2014 taxes for refund rules will make everyone happy. The e-filing system is improved this year for tax payers. The whole process is more efficient and allows taxpayers to get his or her refunds faster. This process is a welcome addition to the tax refund process. The 2014 tax refund rules remain unchanged.
After all of these changes are noted and the taxpayer knows the basic new deduction changes and all of the other refund rules, they might have some more questions about how to know when and how much they will get back. Sometimes a taxpayer might need a reimbursement calculator before filing his or her claim. Thankfully, that is available through the IRS Tax site.
The entire process is a fast process for those that use the IRS website for filing. E-filing allows tax payers to get refunds faster and in easier methods. Those taxpayers with a bank account can have the refund deposited directly. Those people can get refunds faster. Another option is a pre-paid debit card for use. When the refund is ready the taxpayer receives an email when the refund has loaded to the card. The final option is to receive a regular check. Either of these options allows the money to get where the tax payers needs it faster for the 2014 tax season.