2014 Tax Planning
September 25, 2014 

     We are sending you this newsletter to inform you of some of the changes that are important to know about as we approach the end of the tax year.  In this issue we will highlight the updated 2014 tax brackets & other limitations, the Section 179 deduction, and the state unemployment taxable wage base.
 2014 Tax Planning

    Tax planning continues to be a complicated and critical task.  While we do not have room to cover all of the new tax laws in this newsletter, we would like to assist you with tax saving strategies that apply to your business or individual return.  Now is the time to start thinking about taxes and the ways to minimize your liability.  This allows time before the end of the year to implement any changes that need to be made.  By January, it will be too late.  Please contact our office if you are interested in a tax projection to help minimize your tax liability for 2014 and beyond.

   

 2014 Income Tax Bracket

 
     Listed below are the updated income tax brackets, which show the tax rates for the applicable ranges of income for each filing status.  

 

2014 Tax Bracket

Rate

Single Filers

Head of Household Filers

Married Filing Jointly or Qualifying Widow/Widower

Married Filing Separately

10%

$0 to $9,075

$0 to $12,950

$0 to $18,150

$0 to $9,075

15%

$9,076 to $36,900

$12,951 to $49,400

$18,151 to $73,800

$9,076 to $36,900

25%

$36,901 to $89,350

$49,401 to $127,550

$73,801 to $148,850

$36,901 to $74,425

28%

$89,351 to $186,350

$127,551 to $206,600

$148,851 to 226,850

$74,426 to $113,425

33%

$186,351 to $405,100

$206,601 to $405,100

$226,851 to $405,100

$113,426 to $202,550

35%

$405,101 to $406,750

$405,101 to $432,200

$405,101 to $457,600

$202,551 to $228,800

39.6%

$706,751 +

$432,201 +

$457,601 +

$228,801 +

   

2014 Credit AGI Limitations

  

     There are many credits that are available to qualifying taxpayers.  However, most are subject to phase-outs once Adjusted Gross Income reaches a certain threshold.  Listed below are some of the more common tax credits available and the corresponding AGI phase-outs for each.
 

2014 Credit AGI Limitations

 

Single Filers

Head of Household Filers

Married Filing Jointly or Qualifying Widow/Widower

Married Filing Separately

Child Tax Credit = $1,000 (per child)

$75,000

$75,000

$110,000

$55,000

Adoption Credit = $13,190

$197,880

$197,800

$197,880

$197,880

Hope Scholarship/American Opportunity = $2,500

$80,000

$80,000

$160,000

$ -

Lifetime Learning Credit $2,000

$54,000

$54,000

$108,000

$ -

2014 Standard Deduction

     Listed below are the standard deductions for each filing status.  Like tax credits, the standard deduction is subject to a phase-out once Adjusted Gross Income reaches a certain threshold.

 

 

Standard Deduction

2014 Phase-out begins

Single Filers

$6,200

$254,200

Head of Household Filers

$9,100

$279,650

Married Filing Jointly or Qualifying Widow/Widower

$12,400

$305,050

Married Filing Separately

$6,200

$152,525

Section 179 Limits

 

The Section 179 deduction allows for the immediate write-off of certain

qualified assets.  For the previous several years leading up to and including 2013, the maximum Section 179 deduction was increased to $500,000.

       The immediate "expensing" of capital assets was approved by Congress in an effort to help businesses through the recent economic downturn.  However, as of this time Congress has not passed a bill to extend the $500,000 limit into 2014.  The maximum deduction for 2014 will be $25,000 unless Congress enacts new legislation.

       Please note that this will have a significant effect on your tax liability if your business purchases more than $25,000 of assets in 2014.  While we anticipate that Congress will pass an extension on the increased deduction limit, nothing is finalized as of right now.  If you have any questions or concerns regarding the Section 179 deduction and how it may affect your tax situation, please contact our office.

  

State Unemployment Tax

 

State unemployment tax is paid by an employer and is based on the 

employee's wages.  Although all wages for covered employees must be reported to the state of Colorado, only wages up to a certain amount are actually taxable for purposes of unemployment.  This amount, the taxable wage base, is $11,700 for 2014 and is set to increase to $11,800 for 2015.

 
Please feel free to contact us with any questions you may have regarding the information above, or if there is another way we can serve you.   
 Firm Signature
Soukup, Bush & Associates, P.C.
(970) 223-2727
www.soukupbush.com