Every year, the Internal Revenue Code (IRC) go through some minor changes that might affect your tax filing situation and also the amount of money you owe the IRS. As 2015 tax filing season as begun, you have to stay abreast of latest changes to tax laws and how they will affect you. In this article, we will look into 3 important areas where some biggest changes have actually been made to the Internal Revenue Code.
The “Affordable” “Care” Act Changes for the Tax Year
Affordable Care Act (ACA), commonly known as ObamaCare is at full-swing and it's time to take a closer look of the new rules that comes into effect beginning 2015. According to the health-care reform law (individual mandate), most citizens should have health insurance or risk paying out a penalty. People may choose to purchase their very own private insurance coverage or insurance from their state operated insurance exchanges for instances when health coverage is not presented through their organization.
Those who did not get health coverage must fork out noncompliance penalty to the Internal Revenue Service beginning this present year. For instance, the non-compliance penalty for the 2014 tax period is $95 per individual and up to $285 for a household or one percent of income, depending on whichever is higher. In 2015, the fine rises substantially to the greater of $325 to individuals and $975 for families or 2% of income. The scheduled penalty for the 2016 tax year is far worse: a greater of 2.5% of income or $695 per adult and $2,085 for households.
From 2015, small businesses with fewer than 50 employees can get access the Small Business Health Options Program or SHOP, for health insurance to workers and themselves. To assist pay money for employee premiums, tax credits are given to companies with fewer than 25 full-time employees, with average annual salaries under $50,800. The Affordable Care act doesn't yet impose an employer coverage mandate for small enterprises with less than fifty full-time employees.
2015 Tax Rate Changes
Individuals with taxable incomes of $413,200 ($464,850 for married taxpayers filing a joint return), now is going to be taxed at the highest rate of 39.6 percent. This is actually up from the 2014 standards of $406,750 and $457,600, respectively.
There's no change to capital gains tax and the most long-term capital gains will continue to be taxed at the 15% rate (except if you are in the 39.6% bracket and then you will be treated to a 20% long-term capital gains rate because government said so. Standard deductions increases to $6,300 for single filers, up from $6,200 for 2014 and $12,600 for married joint filers in 2015. Personal and dependency exemptions increases another $50 to $4,000 for the year 2015.
Retirement Benefit Changes in 2015
For all those looking to obtain the most from their existing 401(k), the laws will enable individual contributions of $18,000 to 401(k) plans in 2015. Furthermore, those qualified to make catch-up contributions may contribute $6,000.
The most significant change in the tax law is the new rollover limitation. Starting on Jan. 1, 2015, people can do only one tax free rollover from one eligible IRA to another IRA in a year. A rollover is known as distribution from one retirement program that you make a contribution to another retirement program. Prior to 2015, individuals were able to exclude rollover distributions from one IRA to another from income if the lump sum distribution was deposited into another eligible plan within 60 days. The previous rules permitted citizens to essentially have several 2 month loans right from one IRA of many on a tax-free basis. Unfortunately, the new laws has wiped out such tax-free IRA loans. Taxpayers still have got a way to make several tax-free transactions between eligible IRA’s in a twelve month period.
Citizens could make these transfers by directing their trustee to transfer their IRA right to another IRA trustee. Please note that not all kinds of IRA’s can be transferred to another IRA without getting a tax liability. It's more critical than ever for our clients with numerous retirement accounts to obtain assistance before taking distributions.