Monthly Archives: August 2014

FY 2015 Objectives Report to Congress

 

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

JRC-FY15-landing-page-graphic

To date, fiscal year 2014 has been an active year for the IRS. In addition to accepting the National Taxpayer Advocate’s proposal to adopt a Taxpayer Bill of Rights (TBOR), the IRS ran a generally successful filing season (although taxpayer services were sub-optimal largely due to staffing limitations), instituted a more equitable approach to its Offshore Voluntary Disclosure initiative, and introduced a voluntary system for educating unenrolled tax-return preparers. The IRS has also taken significant steps to implement the Affordable Care Act (ACA) and to prepare for the 2015 filing season. But as we note in this report, the good news also raises additional questions and concerns.

READ THE PREFACE


Selected Areas of Focus


Volume II

IRS Responses and National Taxpayer Advocate’s Comments Regarding Most Serious Problems Identified in 2013 Annual Report to Congress

In each Annual Report to Congress, the National Taxpayer Advocate identifies at least 20 of the most serious problems encountered by taxpayers. While in previous years, the IRS’s responses to the identified problems were published as part of the Annual Report, the IRS’s responses to the 2013 Most Serious Problems are published here, along with the National Taxpayer Advocate’s comments on those responses to those comments. In this way, we retain full transparency regarding the IRS’s perspective on our recommendations to address taxpayer problems while still complying with the statute governing the report, which states that the report go directly to Congress without prior review by the Commissioner or others.

READ MORE ABOUT VOLUME II


In keeping with our statutory mission, this report highlights key areas TAS will focus on in the coming year. These are areas where taxpayer rights are not being met or where we can do significantly more to protect taxpayer rights. We look forward to working with the IRS and Congress to ensure the perspective and the core rights of the U.S. taxpayer are considered when important tax administration decisions are made.

- Nina Olson, National Taxpayer Advocate

ADDITIONAL AREAS OF THE OBJECTIVES REPORT

 

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2015 HSA amounts

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

2015 HSA amounts HSA-piggy_360_360_95

Health Savings Accounts (HSAs) were created as a tax-favored framework to provide health care benefits mainly for small business owners, the self-employed, and employees of small to medium-size companies who do not have access to health insurance.

The tax benefits of HSAs are quite substantial. Eligible individuals can make tax-deductible (as an adjustment to AGI) contributions into HSA accounts. The funds in the account may be invested (somewhat like an IRA), so there is an opportunity for growth. The earnings inside the HSA are free from federal income tax, and funds withdrawn to pay eligible health care costs are tax-free.

An HSA is a tax-exempt trust or custodial account established exclusively for the purpose of paying qualified medical expenses of the participant who, for the months for which contributions are made to an HSA, is covered under a high-deductible health plan. Consequently, an HSA is not insurance; it is an account, which must be opened with a bank, brokerage firm, or other provider (i.e., insurance company). It is therefore different from a Flexible Spending Account in that it involves an outside provider serving as a custodian or trustee.

The recently released 2015 inflation-adjusted contribution limit for individual self-only coverage under a high-deductible plan is $3,350, while the comparable amount for family coverage is $6,650. For 2015, a high-deductible health plan is defined as a health plan with an annual deductible that is not less than $1,300 for self-only coverage and $2,600 for family coverage, and the annual out-of-pocket expenses (including deductibles and copayments, but not premiums) must not exceed $6,450 for self-only coverage or $12,900 for family coverage.

 

Herman and Company CPA’s proudly serves Bedford Hills NY, Chappaqua NY, Harrison NY, Scarsdale NY, White Plains NY, Mt. Kisco NY, Pound Ridge NY, Greenwich CT and beyond.

Required Health Insurance for 2014

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

What you need to know about required health insurance coverage for 2014.

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Beginning in 2014, the individual shared responsibility provision of the Affordable Care Act (ACA) requires you and each member of your family to have qualifying health insurance (called minimum essential coverage), have an exemption, or pay a shared responsibility penalty with your 2014 individual income tax return, Form 1040. Many people already have minimum essential coverage and don’t need to do anything more than maintain that coverage.

Do I have minimum essential coverage? You have minimum essential coverage if you have employer-sponsored coverage, coverage obtained through a Health Insurance Marketplace, or coverage through a government-sponsored program. Coverage under certain other plans will qualify as well. You must maintain this coverage for each month of the calendar year.

Am I eligible for an exemption? You may be exempt from the requirement to maintain minimum essential coverage if you’re a member of certain religious sects, a federally recognized Indian tribe, or a health care sharing ministry. You may also be eligible if you are suffering a hardship, meet certain income criteria, or are uninsured for less than three consecutive months of the year.

Will I have to pay a penalty? If you or any of your dependents don’t have minimum essential coverage or an exemption, you will have to pay an individual shared responsibility penalty with your tax return.

For 2014, the annual shared responsibility penalty is the greater of:

 

  • 1% of your household income that is above your tax return filing threshold, or

 

 

  • Your family’s flat dollar amount, which is $95 per adult and $47.50 per child, limited to a family maximum of $285 for 2014.

 

However, the maximum amount cannot be more than the cost of the national average premium for a bronze level health plan available through the Marketplace in 2014.

 

Herman and Company CPA’s proudly serves Bedford Hills NY, Chappaqua NY, Harrison NY, Scarsdale NY, White Plains NY, Mt. Kisco NY, Pound Ridge NY, Greenwich CT and beyond.

Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.