New Changes in Tax Rules
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Duban Accountancy is a CPA firm located in Los Angeles that offers a wide range of financial services to help clients, including business management, tax preparation, and planning. The 2014 tax season brought several changes including higher tax rates for individuals earning over $400,000 and additional Medicare taxes for those earning over $200,000. The new rules also extended education credits for students and teachers while making medical expense deductions more difficult to claim.
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New Changes in Tax Rules
- 2. Located in Los Angeles, California, Duban Accountancy, LLP, is committed to helping clients with a wide range of financial services. Duban Accountancy’s experienced CPAs help clients with everything from business management to income tax preparation and planning.
- 3. From increased top tax rates to higher Medicare taxes, the 2014 tax season has seen a wide range of changes in tax rules and legislation. One of these changes, which won’t affect many Americans, is a higher top tax rate for filers with higher income. While the Bush-era tax cuts were extended for most filers, the tax rate for filers who make over $400,000 was increased to 39.6 percent. High-income filers will have a larger chunk of their income going to taxes, and may also see cuts in personal exemptions and deductions. Further, filers with incomes of over $200,000 will pay more into Medicare with an additional 0.9 percent tax.
- 4. The new tax rules have also extended education deductions for students and teachers. Students paying for fees and tuition are eligible for up to $2,500 in credit through the American Opportunity Credit, while having access to additional deductions for tuition expenses and loan interest. Similarly, up to $250 of out-of-pocket expenses will be deductible for teachers who bought books and school supplies during the year. Another change is the increased difficulty of writing off medical expenses. Medical expenses are only deductible if they go beyond 10 percent of a filer’s adjusted gross income, which is an increase of over two percent from the previous year. However, for filers over the age of 65, the old rate of 7.5 percent will still apply.