As a tax law firm, The McGuire Law Firm attempts to remain abreast of current tax law and changes that impact our clients. As tax attorneys, we attempt to educate our clients on the tax laws so they understand the tax laws and therefore the impact these tax law changes will have.
Recently, the Internal Revenue Service announced many tax law changes and provisions to current tax law that tax attorneys and taxpayers should be aware of. Below are the tax law changes that most taxpayers and tax attorneys should be aware of.
In 2014, the standard deduction will increase to $6,200 for single taxpayers and $12,400 for taxpayers filing as married filing joint. This is an increase from $6,100 and $12,200 respectively from 2013. For those taxpayers filing as head of household, the 2014 standard deduction is $9,100 an increase from $8,950.
In 2014, itemized deductions are phased out or limited beginning at $254,200 for single taxpayers and $305,050 for married filing joint taxpayers.
The 2014 personal exemption increased $50 to $3,950 for 2014, but this exemption is subject to phase out when a single taxpayer has an adjusted gross income of $254,200 or more, and when taxpayers filing married filing joint have an adjusted gross income of $305,050 or more.
In 2014, the highest tax rate of 39.6% will impact single taxpayers whose income is in excess of $406,750 and for taxpayers filing married filing joint, $457,600.
The annual gift tax exclusion for 2014 will remain at $14,000. Thus an individual can gift up to $14,000 in 2014 without lowering their lifetime gift exclusion. The gifting of assets within the annual gift tax exclusion can be a wonderful way to lower a taxable estate. Any individual considering gifting property to loved ones should consult with their tax attorney.
The lifetime exclusion amount for estates of decedents who die in 2014 is $5,340,000 which was an increase from the $5,250,000 amount in 2013.
There was an increase in the foreign earned income exclusion to $99,200, meaning an individual can exclude up to $99,200 of foreign earned income on their 1040 United State Individual Income Tax return. Prior to taking the exclusion, a taxpayer should consult with their tax attorney or tax professional to ensure that they qualify for the foreign earned income exclusion.
A Denver tax attorney at The McGuire Law Firm can assist you with your tax questions and matters. Further, a tax attorney can assist you with tax planning and other matters.