Congress finally did something!

With just days before the end of the year, Congress finally passed a bill extending over 55 tax breaks for individuals and businesses.  The key items that were extended until 12/31/14 are:

Individuals

• Teacher's Credit ($250) - above the line deduction for teaching supplies
• Ability to exclude personal residence Cancellation of Debt Income (for foreclosures and short sales)
• Mortgage Insurance premiums (aka PMI) are deductible as mortgage interest
• Sales Tax is deductible (important for people in states without state income tax)
• Tuition Deduction
• Charitable contributions can count as RMDs from your IRA

Businesses

• Multiple beneficial depreciation rules and limits

529-ABLE plans
Within the Tax Extender bill, Congress also passed the ABLE Act (Achieving a Better Life Experience) which allows Section 529 plans (tax deferred savings accounts) to be created for disabled individuals. These accounts cannot be created until the Treasury writes the rules for them in 2015, so more will be shared about this in a later blog.  But early indications are these will be very beneficial for families trying to pay for care for disabled individuals.

Be sure to speak to your Enrolled Agent to see how these items can benefit you personally.

How to Avoid the Penalty for not having Health Insurance

If you did not have health insurance in 2014, then you may have a higher tax bill when you file your tax return.  This is because the Individual Mandate of the Affordable Care Act (ACA), also known as ObamaCare, requires individuals to have health insurance or pay a penalty.

The good news for the uninsured is that if you qualify for an exemption, you will avoid the penalty.  The well-known exemptions are things like:

• You were uninsured for less than 3 months of the year
• You are a member of a religious sect with objections to insurance
• The cost is 8% or more of your household income

But, did you know that there are also hardship exemptions available?  Some examples of the hardship exemptions include:

• You were homeless
• You were evicted in the past 6 months or were facing eviction or foreclosure
• You received a shut-off notice from a utility company
• You had medical expenses you couldn’t pay in the last 24 months that resulted in substantial debt
• You experienced the death of a close family member

Go to the Health Care Exchange website to see the complete list of exemption possibilities.


Many of these exemptions need a certificate from the Exchange acknowledging your hardship as valid.  So, if you think you qualify you should apply now to ensure you have the certificate in hand before April 15th.  The Health Care Exchange website has all the details about applying for the exemption.