Filing Your 2014 Tax Return – What You Need To Know
For tax year 2014, personal exemptions and standard deductions will rise and tax brackets will widen due to inflation. By law, the dollar amounts for a variety of tax provisions, affecting virtually every taxpayer, must be revised each year to keep pace with inflation and recent tax legislation. More than 40 tax provisions unique to this year’s tax filing season were made to the Tax Code. Here are some things you should know when filing taxes this year:
- Your 2014 Individual Federal Income Tax Return is due by April 15, 2015.
- For an automatic 6-month extension of time to file, submit Form 4868 to the IRS. Caution: Although Form 4868 allows you more time to file, it does not extend the time to pay your taxes. Filing or paying after the due date may result in penalties and interest.
- If you expect to owe on your tax return, see 11 Tips for Taxpayers Who Owe Money to the IRS
- If you owe because of insufficient federal tax withholding, you can determine the correct amount of withholding here. If you owe due to lack of estimated tax payments, learn about ES Payments here.
- The personal and dependent exemption amounts have increased to $3,950 (compared to $3,900 for 2013).
- The standard deduction has also increased for 2014. The 2014 amounts are:
Single $6,200 (compared to $6,100 for 2013)
Head-of-household $9,100 (compared to $8,950 for 2013)
Married Filing Joint $12,400 (compared to $12,200 for 2013)
Married Filing Separately $6,200 (compared to $6,100 for 2013)
The IRS estimates approximately 66% of taxpayers take the standard deduction, rather than itemizing deductions. See Itemized vs. Standard Deductions – How to Choose
- To claim a deduction for business use of your vehicle, use the standard mileage rate of 56 cents for each business mile driven. See: IRS Mileage Reimbursement Rates for 2015
- The Alternative Minimum Tax (AMT) exemption amount is $52,800 ($82,100, for married couples filing jointly). The 2013 exemption amount was $51,900 ($80,800 for married couples filing jointly).
- The 39.6% tax rate on ordinary income for single taxpayers earning over $400K (or $450K married) remains the same.
- Capital gains and dividends now have a top tax rate of 20%
- The annual exclusion for gifts stays at $14,000 for 2014.
- The estate tax exemption increases to $5,340,000, up from $5,250,000 for estates of decedents who died in 2013.
- The small employer health insurance credit provides that the maximum credit is phased out based on the employer’s number of full-time equivalent employees in excess of 10 and the employer’s average annual wages in excess of $25,400.
- What are the IRS mileage reimbursement rates for this year? See here for updated vehicle mileage rates.
- Learn when you should file, even if you’re not required to.
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