TAX UPDATES FOR 2014

checklist

Here are some more helpful updates from the STERLING FINANCIAL TEAM on some Tax Extensions for 2014. It’s always smart to check your list twice………..

 

Mileage rates for 2015:  57.5 cents for business use, 23 cents for medical/moving, and 14 cents for charity.


Tax Extenders for 2014 include, but are not limited to the following:

  • The deduction for mortgage insurance premiums.
  • A provision allowing persons over age 70-1/2 to make tax-free withdrawals from their Individual Retirement Accounts (IRAs) to make charitable contributions.
  • Debt Forgiveness exclusion for a personal residence.
  • The educator expense deduction-adjustment to income of up to $250 for grade K-12 educators.
  • Tuition and fees deduction-adjustment to income up to $4,000.
  • Deduction for state and local general sales tax as an itemized deduction (Schedule A) for sales tax in lieu of state income tax.
  • Nonbusiness energy property credit-up to $500 maximum lifetime credit for qualified energy efficient home improvements (windows, furnaces, etc.).
  • Electric drive vehicle credits-the credit for two-and three-wheeled vehicles has been extended.  (The provisions for low-speed electric vehicles expired).
  • The credit for plug-in electric drive motor vehicles, such as the Nissan Leaf or Chevy Volt, is still available.
  • Energy-efficient appliance credit.

 
Provisions affecting businesses:

  • Bonus Depreciation allowing an additional first year deduction of 50 percent of the cost of new equipment.
  • Enhanced Section 179 Expense Limitations allowing for the expense of $500,000 on acquired property for business use.
  • New markets tax credit.
  • Wage credit for employers of uniformed active duty service personnel.
  • Work opportunity tax credit.
  • Fifteen-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements.
  • Enhanced charitable deduction for contributions of food inventory.
  • Incentives for biodiesel and renewable diesel.
  • Alternative fuels excise credit.

 

HAPPY HOLIDAYS

PAYROLL TAX CUT EXTENDED! Well at least for now…

 

Payroll Tax Cut

PAYROLL TAX CUT EXTENDED! Well at least for now…

The US Congress just recently passed a two-month extension of the payroll tax cut on the employee side starting at the first of the year.  This cut lowered the employee portion of the payroll tax from 6.2% down to 4.2%.  The temporary extension was passed eight days before it was set to expire.  Additionally, the extension also keeps in place expanded unemployment benefits and it suspends a reduction in Medicare payments to doctors through the end of February.

With the 2012 elections coming up, neither side wants to take the blame for lowering the net pay of voters everywhere.  That would be political disaster.  We can only hope in the next couple months when Congress reconvenes that they will be able to work out a longer solution or reorganization.  Good ole bipartisanship at its best!

AZ MINIMUM WAGE INCREASES! Hourlies and Business Owners Listen Up!

AZ MINIMUM WAGE INCREASES! Hourlies and Business Owners Listen Up!

On October 13th, 2011, the Industrial Commission of Arizona bumped up the minimum wage by $.30 to $7.65/hour starting on Jan 1, 2011.  Tipped employees, who make $3 below the standard minimum wage, will also receive the raise.  For a full-time wage worker, that is $624 more next year.

This is partially due to fact that the U.S. Bureau of Labor Statistics reported that the year-to-year cost of living for all urban areas went up 3.8% from August 2010.  With the upcoming change in minimum wage, AZ will be above the federal rate of $7.25/hour.  Enjoy it or hate it, it is going in effect starting 2012!

Special Assessment on Taxable Wages Paid in 2011 & 2012 – AZ Employers Listen Up!

Tax Burden

Arizona is one of more than 30 states that borrowed money from the federal government after our states’ unemployment trust funds were sucked dry during the economic recession. This enabled us to keep paying unemployment benefits to those that qualified as required by federal law.  What does this mean?

MORE TAXES – unfortunately.

A House Bill passed on July 20 of this year retroactively imposing a “Special Assessment” tax on all taxable wages paid in 2011 and 2012.  The first three calendar quarters of 2011 is now due by October 31, 2011.  The agency that will be collecting it is the DES Unemployment Insurance Tax Section from which you should be receiving a letter or notice shortly (if you haven’t already).  Here are the details:

• All employers subject to Arizona UI Tax in 2011 and 2012 are also subject to the Special Assessment
• “Taxable Wages” are the first $7,000 of gross wages paid to each employee in the calendar year
• For 2011, it is .4% of taxable wages (max of $28 per employee)
• For 2012, it is estimated to be around .6% – .8% ($42 – $56 max per employee)

You already know the bad news… The small amount of good news? It is tax deductible as a cost of doing business.

We will continue to post updates so stay tuned for more info on how to not get like the little guy in the picture…