Keeping track of 2014 changes
Posted On: 4-13-2014 | Posted By: WK Staff
We’ve collected the various 2014 changes to mileage rates, payroll withholdings, qualified plan contributions, and other limits and rates and placed them in one spot. If you have questions about any of this information, contact your WK advisor.
Beginning January 1, 2014, the standard mileage rate for business use of a vehicle is 56 cents per mile, a 1/2 cent decrease from the 2013 rate. Reimbursement for medical or moving purposes is 23.5 cents, and 14 cents for miles driven in service of charitable organizations.
Health insurance coverage penalties and credits
Beginning in 2014, nonexempt U.S. citizens and legal residents must pay a penalty if they do not maintain minimum essential coverage, which includes government-sponsored programs (Medicare, Medicaid, CHIP), eligible employer-sponsored plans, plans in the individual market, certain grandfathered group health plans and other coverage as recognized by the Department of Health and Human Services. There are a number of exceptions, such as one for certain lower-income individuals. Also, individuals who received a notice stating their current health insurance plan is being cancelled also may qualify for an exemption.
Also this year, qualifying taxpayers who get health insurance coverage by enrolling in a qualified health plan through an Exchange are eligible for a new refundable tax credit (the “premium assistance credit”).
Key Estate and Gift Tax Amounts
In 2014, the federal tax rate on estates in excess of the lifetime “applicable exclusion” amount of $5.34 million is 40 percent. The federal gift tax rate is also 40 percent on amounts in excees of the annual exclusion amount of $14,000.
WK Member Mark Gingrich, CPA, J.D. can advise you in the areas of estate and gift tax planning.
Qualified Plan Contributions
See the chart below for annual limits for 2014, as compared to 2013 and 2012.
3.8% Medicare surtax
For tax years beginning after December 31, 2012, certain unearned income of individuals, trusts and estate is subject to a surtax. This surtax, also called the “unearned income Medicare contribution tax” or the “net investment income tax”, is 3.8% of the lesser of net investment income OR the excess of modified adjusted gross income over the unindexed threshold amount ($200,000 for individuals and $250,000 for married taxpayers filing jointly).
Status of Expired Provisions
A number of federal tax provisions (including bonus depreciation, Section 179 depreciation, and a variety of individual, business, charitable, energy and community assistance provisions) that had been extended by Congress in previous years expired at the end of 2013. Congress could still take action to extend these provisions for 2014, but it is uncertain whether that will happen or not. We will continue to monitor changes throughout 2014.
For more information on any of these changes, please contact your WK advisor at (573) 442-6171 or (573) 635-6196. If you would like to receive Client Alerts via email, contact the Web Editor.