June 2, 2015
Tax planning for 2015 is a venture in uncertainty.
On April 16, 2015, the U.S. House of Representatives voted to repeal the estate tax, but this was seen as largely a symbolic gesture because the U.S. Senate does not appear to have enough votes to pass the legislation. Even if the bill were to survive the Senate, President Obama is likely to veto it. The House is apparently attempting to keep the issue in the forefront with an eye to repeal in 2017.
Rules regarding IRA rollovers have changed. As of 2015, taxpayers may make only one IRA-to-IRA rollover per year. This does not limit direct rollovers from trustee to trustee.
It should also be pointed out that the penalty for failure to maintain qualifying health insurance takes a big leap in 2015. The penalty is the greater of $325 for each adult and $162.50 for each child (but no more than $975) or 2 percent of household income minus the amount of the taxpayer’s tax-filing threshold.
The current letter provides details about the following areas of taxation:
- Inflation adjustments
- Itemized deductions
- Timing of deductions
- Noncash contributions
- Capital gains
- Home office safe harbor
- Home office deduction for a corporation
- Tangible property regulations
Tax laws change at an amazing pace. It is estimated that more than 5,000 changes to the federal tax laws have been made since 2001. That’s an average of more than one change per day. The Internal Revenue Code was 73,954 pages in 2013, which makes War and Peace look like a short story.
Tax planning is an ongoing process. Your tax picture can change—sometimes dramatically—during the course of a year, and you need to react accordingly. Implementing thoughtful midyear strategies now may help you lessen the taxes you face in 2016.
This article was originally posted on June 2, 2015 and the information may no longer be current. For questions, please contact GRF CPAs & Advisors at email@example.com.