1. Money

Discuss in my forum

William Perez

What's New in Tax for Year 2014

By January 1, 2014

Follow me on:

Here's a quick summary if what's new in federal taxes for the year 2014.

2014 tax rates

  • There are seven tax brackets (10%, 15%, 25%, 28%, 33%, 35%, and 39.6%) that apply to ordinary income, and three tax brackets (0%, 15%, 20%) that apply to long-term gains and qualified dividends. This is the same tax rate structure as for the year 2013, but the income brackets to which the rates apply have been adjusted to account for inflation.
  • Additionally, the 0.9% Medicare surtax and the 3.8% net investment income surtax, first introduced for 2013, continue to apply to higher-income people (over $200,000 for single filers).

Standard deduction

  • Single: $6,200
  • Head of Household: $9,100
  • Married Filing Jointly: $12,400
  • Married Filing Separately: $6,200
  • Qualifying Widow/Widower: $12,400
  • Dependent: $1,000-$6,200

Personal exemption

  • $3,950 per taxpayer or dependent.
  • The amount that can be claimed phases out once adjusted gross income reaches $254,200 (for single filers).

Retirement plan contribution limits

  • Traditional or Roth Individual Retirement Accounts: $5,500 (plus $1,000 catch-up contribution for people age 50 or older)
  • 401(k) Plans$17,500 (plus $5,500 catch-up contribution for people age 50 or older)
  • 403(b) Plans$17,500 (plus $5,500 catch-up contribution for people age 50 or older)
  • 457 Plans$17,500 (plus $5,500 catch-up contribution for people age 50 or older)
  • SIMPLE IRA plans$12,000 (plus $2,500 catch-up contribution for people age 50 or older)
  • Maximum SEP-IRA or solo 401(k) contribution:$52,000

New tax provisions

Same-sex married couples

  • must file their federal return using either the married filing jointly or married filing separately status, although they might need to file their state returns as if they were single depending on what state they live in.

Tax provisions that expired at the end of 2013. These may or may not be renewed by Congress.

Tax provisions that expire at the end of 2014

Key dates in 2014

  • January 31, IRS will begin processing personal tax returns.
  • April 15, the normal deadline for filing personal returns. (It falls on a Tuesday.)
  • October 15, the extended deadline for filing personal returns. (It falls on a Wednesday.)

Foreign Bank Account Reports

  • This form has been changed in two ways. First, the form has been re-numbered: it's now called FinCEN Form 114. Second, FBARs must be filed electronically with FinCEN. If you want to file on paper, you'll need to request permission. See the new FBAR instructions from FinCEN (pdf) and the IRS's page about FBARs.

 

May you have a prosperous new year!

"When prosperity comes, do not use all of it." Confucius

Comments
March 29, 2014 at 2:15 pm
(1) mike says:

info here is wrong

married filing jointly standard deduction is 12,200 not 12,400

personal exemption is 3900 not 3950

March 29, 2014 at 6:27 pm
(2) William Perez says:

These amounts for tax year 2014. I have checked that the standard deduction and personal exemption amounts are stated correctly.

Leave a Comment

Line and paragraph breaks are automatic. Some HTML allowed: <a href="" title="">, <b>, <i>, <strike>
See More About
  1. About.com
  2. Money
  3. Tax Planning: U.S.

©2014 About.com. All rights reserved.