Major Tax Changes of 2014
With 2014 winding down, businesses and individuals are shifting their thoughts and efforts from operational efforts to taxes. This past year has seen the implementation of some significant changes in the tax code. This shift has caused most taxpayers to rethink their tax strategy. Here are some of the notable tax changes of 2014:
The Affordable Care Act
Clearly, the largest change to the tax code in 2014 was the Affordable Care Act. In fact, it is the biggest change to be made to the tax code since the 90's. The most notable change implemented by the ACA is the requirement that healthcare coverage minimums be imposed on businesses. The changes from last year makes businesses with over 50 full-time employees provide health insurance for those employees. Additionally, all uncovered individuals must pay a fine.
Also enacted this year was the Federal Insurance Contribution Act, or FICA. FICA will require self-employed taxpayers to pay 15.3% in FICA taxes, while other taxpayers pay around 8.5% as a result of the change. This legislation was passed to offset the increasing cost of social security.
For Americans living overseas, the Foreign Account Tax Compliance Act (FATCA) will make tax filing far more difficult this year. American citizens living in another country could face a 30% withholding tax if their banks do not comply with FATCA's requirements. The act also adds several hundred additional pages of instruction to the tax filing process.
Aside from these rather major liability increases, several breaks were implemented.
Student Loan Changes
The most significant tax break was implemented for individuals with student loans. The new system protects graduates by keeping payments locked to no more than 10% of their income with some students eligible for total debt forgiveness after a decade.
Several smaller changes occured as a result of changes to the inflation index, which could save some taxpayers up to $200.