As the year draws to a close, taxpayers will face countless new taxes, tax changes, and new laws that may affect both their 2013 year-end and 2014 planning. Thomas Astore, CPA, JD, Partner at Rodman & Rodman, P.C., an independent accounting and tax firm, believes these are the top 10 issues that taxpayers should consider in developing a tax strategy:
1. The new 39.6 percent tax rate for individuals, trusts and estates with ordinary income exceeding certain thresholds ($450,000 for joint returns, $400,000 for single taxpayers and $11,950 for trusts and estates).
2. A potential new top tax rate of 20 percent for capital gains and qualified dividend income for individuals, trusts and estates for taxpayers with ordinary income greater than certain thresholds (same thresholds as listed above).
3. The Medicare Surtax is a 3.8 percent tax on net investment income for individuals, trusts and estates with ordinary income exceeding certain thresholds ($250,000 for joint returns and $200,000 for single).
4. The Hospital Insurance Surtax of .9 percent for taxpayers whose wages or self-employment income exceeds certain thresholds ($250,000 for joint returns and $200,000 for single).
5. Phase-out of personal exemptions for high-income taxpayers.
6. Phase-out of itemized deductions for high-income taxpayers.
7. Expiring tax provisions for many business taxpayers, including: bonus depreciation, enhanced section 179 expensing election, work opportunity credit and the research and development credit.
8. The new tangible property tax regulations that take effect in January may affect capitalization and expense policies for business taxpayers.
9. The new apportionment sourcing rules for Massachusetts business taxpayers that take effect in January may increase income subject to Massachusetts tax.
10. Taxpayers should expect greater IRS scrutiny and audits for flow-through taxpayers including: S corporations, partnerships and sole proprietorships.
"Now is the time to take stock, make changes, and plan for the 2014 tax year,” said Astore. “These key issues can help guide you through the planning and decision process, particularly if you are a business owner."
About Rodman & Rodman P.C.
Founded in 1961 and listed in the Boston Business Journal's "Top 50 Firms," Rodman & Rodman, P.C. provides accounting, tax and business services to small and medium-sized companies. For three consecutive years, Rodman & Rodman has been named one of the "Best Accounting Firms to Work For" in Accounting Today. Rodman & Rodman is one of the only providers in New England with a specialized “Green Team”, a green energy and clean technology accounting and tax practice that serves “green” clients throughout the U.S. The company is Green Business Certified. The firm has locations in Braintree and Newton. For more information, email email@example.com, visit their website at www.rodmancpa.com or contact (617) 965-5959.