GOTCHA - Here are seven big U.S. tax changes that will affect a large number of taxpayers starting in January 2015: o Health Insurance Penalty: Part of the Affordable Care Act mandates that all Americans have health insurance, or pay a tax penalty as a result. In 2014, the penalties are 1% of your household income or $95 per person – whichever is greater. But in 2015, those penalties ramp up significantly to 2% of total household income, or $325 per person. o 401(k) Limits: The limit on employee contributions to a 401(k) plan will increase to $18,000, up $500 from 2014s cap. That means you tell your payroll department to adjust up your contribution starting on the first of the year to ensure you save the maximum allowable in 2015. o Flexible Spending Account Limits: The annual limit on employee contributions to flexible spending accounts is now $2,550 for qualified health care expenses. Thats up $50 from 2014, so make sure you opt in for this new maximum amount if you take advantage of a health care FSA. o Standard Deduction: The standard deduction – that is, the basic tax break extended to all Americans each year -- rises to $6,300 for single filers and $12,600 for married taxpayers filing jointly in 2015. Thats up $100 and $200, respectively, from 2014 figures. o Tax Brackets: For the new tax year starting in January, income tax thresholds have again been adjusted up for inflation. The highest tax rate of 39.6%, for instance, will now apply to single filers who make over $413,200 and married couples making $464,850. Both figures are up about 1.6% from tax year 2014. o IRA Rollovers: Starting in 2015, you can only make one single rollover from an IRA in a 12-month period. This is a bit tricky, because you can still make as many trustee-to-trustee transfers as you wish, moving your money directly from one provider to another. What the new IRS rule targets is the practice of withdrawing all those funds and then re-depositing them in a new account – a tactic some folks were using as a short-term, interest-free loan. o AMT Changes: The so-called alternative minimum tax is quite a headache for many middle-class Americans. Since certain breaks can significantly reduce your tax bill, the IRS created the AMT to set a limit on those benefits – and ensure a minimum tax burden on you. The Alternative Minimum Tax exemption amount for tax year 2015 is $53,600 for individuals or $83,400 for joint filers. Thats up slightly, about 1.5% from 2014.
Posted on: Mon, 05 Jan 2015 23:05:10 +0000
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