With last-minute tax changes becoming more the rule than the exception, it’s getting harder and harder to plan as we scramble just to catch up.
“In December, Congress passed last-minute legislation that extended the last-minute changes for 2013 to 2014,” said CPA Susan Clifford, tax expert and principal at longtime local accounting firm Hancock Askew & Co.
“Although that means no major changes for last year, it doesn’t address 2015, which makes planning for this year a little tricky,” she said.
And it’s not just the IRS – the state is developing “last-minute syndrome” as well, she said.
“For example, IRS Section 179 allows businesses to expense new equipment purchases up to $500,000 in the purchase year instead of capitalizing it over a number of years,” Clifford said. “However, the state capped the allowed expense at $25,000. That’s a big difference if you’re a small contractor trying to buy a bulldozer.”
The good news for businesses in that situation came late last week, she said, when the state changed its cap to match the IRS at a half-million.
“The bad news is that the deadline for filing for corporations is March 15, so most businesses have already done their returns. Anyone who could have taken the larger deduction had they not already filed can file an amended Georgia return. But if the S corporation amends their return, shareholders who have already filed their personal return will also need to amend their Georgia return.”
For the majority of us who aren’t dealing with special situations, changes this year mostly involve inflation adjustments that will allow us to keep a few more of our hard-earned dollars.
To help our readers get through the stresses of tax season and better prepare for the year ahead, the Savannah Morning News and Savannahnow.com have again teamed up with Hancock Askew & Co. to take questions regarding individual and small business returns.
Five of the firm’s tax accountants will be available at lunchtime Wednesday to take your calls and help you sort through questions regarding your individual or small business return.
What they can’t do, of course, is offer legally binding answers to questions specific to your circumstances.
“Because we can’t possibly understand anyone’s complete tax situation in one phone call, we’ll give you our best advice based on what we know about your circumstances and suggestions for seeking additional help if you need it,” Clifford said.
To get you started, here are some of the 2014 income tax adjustments:
• The tax rate of 39.6 percent affects singles whose income exceeds $406,750 ($457,600 for married taxpayers filing a joint return), up from $400,000 and $450,000, respectively.
• The standard deduction rises to $6,200 for singles and married persons filing separate returns and $12,400 for married couples filing jointly, up from $6,100 and $12,200, respectively, for tax year 2013. The standard deduction for heads of household rises to $9,100, up from $8,950.
• The limitation for itemized deductions claimed on tax year 2014 returns of individuals begins with incomes of $254,200 or more ($305,050 for married couples filing jointly).
• The personal exemption rises to $3,950, up from the 2013 exemption of $3,900. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $254,200 ($305,050 for married couples filing jointly) and phases out completely at $376,700 ($427,550 for married couples filing jointly).
• The Alternative Minimum Tax exemption amount for tax year 2014 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 foreign earned income exclusion rises to $99,200 for tax year 2014, up from $97,600, for 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 for tax year 2014, up from $25,000 for 2013.
HOW TO PARTICIPATE
• What: Five accountants from Hancock Askew & Co. will be available to help answer your tax questions.
• When: 11:30 a.m. to 1:30 p.m. Wednesday, March 18.
• Call: 912-629-7752. Calls will be answered in the order received. Selected questions and answers will be published in the Savannah Morning News on Sunday, March 22.
• Cant call in Wednesday? Email your questions to sclifford@hancockaskew.com by 10 a.m. Wednesday. The advisers will answer as many of the emailed questions as space allows in Sunday’s paper.
MEET THE EXPERTS
The Hancock Askew experts who will be available Wednesday to answer your tax questions include:
• Billy Griffin, CPA: Billy is a partner at Hancock Askew and has more than 25 years of accounting experience. He serves individuals and corporate clients in income tax, planning and preparation, financial planning and business structure, budgeting, cost controls, succession planning and management consulting.
• Carolyn McIntosh, CPA: Carolyn is a partner at Hancock Askew and has been serving clients for more than 15 years in the areas of tax, financial planning and management services. Her clients include individuals, fiduciaries, partnerships, corporations and nonprofits. Carolyn specializes in business and tax consulting, family owned businesses, real estate, estate and gift tax, fiduciary tax and nonprofits.
• Susan Clifford, CPA: Susan is a principal at Hancock Askew and has more than 30 years of both public and private accounting experience. She serves individuals, partnerships, corporations, nonprofits, and trusts in the areas of tax and financial planning.
• Stephen Leonard, CPA: Stephen joined Hancock Askew in 2005 as an intern. As a senior manager in the tax department, he provides services to individuals, businesses, trusts and estates such as income and estate tax planning, compliance, business formation, mergers and acquisitions, and succession planning.
• Brian Prevatt, CPA: Brian is a tax manager at Hancock Askew and has been with the firm since 2009. Brian provides tax planning, advisory and compliance services for high net worth individuals and families, sole proprietors, pass-through entities and corporations. His additional expertise includes taxation of master limited partnerships and real estate partnerships, like-kind exchanges, IRS audit representation and administration, federal and state tax credits, bookkeeping and internal accounting resources, retirement planning and executive and stock-based compensation.