Tax Law Changes and Year End Memo to clients

December 6th, 2014

Brief summary of 2014 Tax Law changes:

Individuals with health insurance through a Federal or state exchange will receive Form 1095-A by 1/31/2015.  We will need that form in order to complete the 2014 personal income tax return. Individuals may receive a Form 1095-B from private insurance companies, but it is optional.  Individuals may receive Form 1095-C from their employer, but it is also optional.  Both optional forms will be required for next year (2015) tax returns.

Penalty will be calculated by us for 2014 if no health insurance coverage,  and included with individual income tax return.

2013 tax law provisions not yet renewed by the Senate as of this date: Election to deduct sales tax instead of income tax, Higher education tuition and fees above the line; Teacher classroom expenses up to $250 above the line; PMI mortgage insurance premium deduction; $500 residential energy credit;  50% bonus depreciation; $500,000 first year depreciation write-off limit; Mortgage debt discharge credit; certain other provisions. These provisions are expected to be renewed by year end, but may not be.

The annual gift tax exclusion remains $14,000 per gift.

Federal Estate tax exclusion based on assets under $5,340,000 in 2014 and $5,430,000 for decedents dying in 2015.  NY State Estate tax exclusion based on assets under $2,062,500 until 3/31/15 and $3,125,000 for decedents dying between 4/1/15 and 3/31/16.

Portability of spousal Estate Tax exclusion only available if Form 706 Estate Tax return is filed after the first spouse to die.

If you received a $350 check from NY State in 2014 for the Family Tax Relief Credit, it is not taxable,  but we need to know. (Credit was for 2012 full year NY State residents who claimed a child dependent under age 17and had NY State adjusted gross income between $40,000 and $300,000.

Homeowners receiving a Star credit on their primary residence and having total household income under $500,000 should receive a Real Property Tax Freeze Credit check from NY State.  This check should be about 1.5% of the 2013 school tax bill.  This check is not taxable.

NY City residents may be entitled to a Real Property tax credit up to $500 for 2014 and 2015.  We will calculate this credit if it applies to you.

2014 and 2015 IRA and Roth IRA limits are the same as 2013. $5,500 plus $1,000 for individuals over age 50.

401 (k) increase from $17,500 with a catch-up for age 50 and over of $5,500 for 2014 to $18,000 with a catch-up of $6,000 for 2015

Simple IRA & Simple 401 (k) increase from $12,000 with a catch-up for age 50 and over of $2,500 for 2014 to $12,500 with a catch-up of $3,000 for 2015

This is a brief summary.  We will calculate these and many other Tax Law changes for you when we prepare your business and personal tax returns.

 

YEAR END MEMO – 2014

TO:         All Clients

DATE: January 2015

*****************

FICA Tax changes for 2015:

FICA Tax includes both Social Security coverage and Medicare coverage, and are both a deduction
from employee wages and matched by the employer.

Maximum Wages Subject to
Social Security Tax $ 118,500.00

Maximum Social Security Tax – Employers $7,347.00
Maximum Social Security Tax – Employees $7,347.00

Maximum Wages Subject to  Medicare Tax                        Unlimited

Social Security Tax Rate:
Employees                                                    6.20%
Employers                                                    6.20%

Medicare Tax Rate:
Employees  1.45% (Employees earning over $200,000 are subject to additional 0.09 Medicare Tax)
Employers 1.45%

NYS  minimum  wage  is  $8.75  per  hour and  NJ  minimum  wage  is  $8.38  per  hour

The  Federal  &  State  agencies  have  been  aggressively  looking  for  ways  to  assess  taxes  & penalties.

Forms  1099  are still  an  area  for  target.  All  payments  of  $600.  per  year  to  non-corporate entities for  services  will  need  a  signed  and  completed  Form  W-9  on  file  so  we  can complete  a  Form  1099  at  year  end.         For  all  sales  that  are  exempt  from  sales  tax,  you  must have  a  signed  resale  certificate  or  exemption  certificate  on  file  from  the  customer.

If  you  need any  forms  or  have  any  questions,  please  do  not  hesitate  to  contact  our  office.

Please  be  advised  that  it  is  a  misdemeanor  offense  to  be  collecting  Sales  Tax without  having, your  Certificate  of  Authority  on  display  at  your  place  of business  and,  if  you  have  employees,  you  must  also  have  your  Workers’ Compensation  and  Disability  Insurance  Certificates  displayed.

We  are  an  authorized  Quickbooks-Pro  Advisor  and,  as  such,  can  get  you  discounts  on  Quick-books,  Quickbooks  upgrades,  and  Quickbooks  supplies  directly  from  Quickbooks.   Our  contact  is Keith  Van  Order  and  his  direct  number  is  214-387-2840.   We  were  told  our  clients  would  receive a  30%  discount  when  they  mention  our  name.

We  now  have  a  Facebook  page  under  ” Michael J. Berger and Co. CPA’s, LLP ”
** Additional  information  will  be  posted  to  our  website:  www.bergercpa.com.

 

YEAR END MEMO – 2013

TO:         All Clients

DATE: January 2014

*****************

FICA Tax changes for 2014:

FICA Tax includes both Social Security coverage and Medicare coverage, and are both a deduction
from employee wages and matched by the employer.

Maximum Wages Subject to
Social Security Tax $ 117,000.00

Maximum Social Security Tax – Employers $7,254.00
Maximum Social Security Tax – Employees $7,254.00

Maximum Wages Subject to  Medicare Tax                        Unlimited

Social Security Tax Rate:
Employees                                                    6.20%
Employers                                                    6.20%

Medicare Tax Rate:
Employees  1.45% (Employees earning over $200,000 are subject to additional 0.09 Medicare Tax)
Employers 1.45%

NYS  minimum  wage  is  $8.00  per  hourand  NJ  minimum  wage  is  $8.25  per  hour

The  MTA  Tax  has  been  repealed  as  of  04/01/2012,  for  most  employers.   Additional  information
will  be  posted  to  our  website:  www.bergercpa.com.

The  Federal  &  State  agencies  have  been  aggressively  looking  for  ways  to  assess  taxes  & penalties.

Forms  1099  have  become  an  area  for  target.  All  payments  of  $600.  per  year  to  non-corporate entities for  services  will  need  a  signed  and  completed  Form  W-9  on  file  so  we  can complete  a  Form  1099  at  year  end.         For  all  sales  that  are  exempt  from  sales  tax,  you  must have  a  signed  resale  certificate  or  exemption  certificate  on  file  from  the  customer.

If  you  need any  forms  or  have  any  questions,  please  do  not  hesitate  to  contact  our  office.

Please  be  advised  that  it  is  a  misdemeanor  offense  to  be  collecting  Sales  Tax without  having, your  Certificate  of  Authority  on  display  at  your  place  of business  and,  if  you  have  employees,  you  must  also  have  your  Workers’ Compensation  and  Disability  Insurance  Certificates  displayed.

We  are  an  authorized  Quickbooks-Pro  Advisor  and,  as  such,  can  get  you  discounts  on  Quick-books,  Quickbooks  upgrades,  and  Quickbooks  supplies  directly  from  Quickbooks.   Our  contact  is Keith  Van  Order  and  his  direct  number  is  214-387-2840.   We  were  told  our  clients  would  receive a  30%  discount  when  they  mention  our  name.

We  now  have  a  Facebook  page  under  ” Michael J. Berger and Co. CPA’s, LLP ”
** Additional  information  will  be  posted  to  our  website:  www.bergercpa.com.

YEAR END MEMO – 2012

TO:         All Clients

DATE: January 2013

*****************

FICA Tax Changes for 2013:

FICA Tax includes both Social Security coverage and Medicare coverage, and are both a deduction from employee wages and matched by the employer.

Maximum Wages Subject to
Social Security Tax $ 113,700.00

Maximum Social Security Tax – Employers $7,049.40
Maximum Social Security Tax – Employees $7,049.40

Maximum Wages Subject to  Medicare Tax                        Unlimited

Social Security Tax Rate:
Employees                                                    6.20%
Employers                                                    6.20%

Medicare Tax Rate:
Employees  1.45% (Employees earning over $200,000 are subject to additional 0.09 Medicare Tax)
Employers 1.45%

NYS  and  NJ  minimum  wage  is  $7.25  per  hour

The  MTA  Tax  has  been  repealed  as  of  04/01/2012,  for  most  employers.   Additional  information
will  be  posted  to  our  website:  www.bergercpa.com.

The  Federal  &  State  agencies  have  been  aggressively  looking  for  ways  to  assess  taxes  & penalties.  Forms  1099  have  become  an  area  for  target.  All  payments  of  $600.  per  year  to  non-corporate  entities  for  services  will  need  a  signed  and  completed  Form  W-9  on  file  so  we  can complete  a  Form  1099  at  year  end.

For  all  sales  that  are  exempt  from  sales  tax,  you  must have  a  signed  resale  certificate  or  exemption  certificate  on  file  from  the  customer. If  you  need
any  forms  or  have  any  questions,  please  do  not  hesitate  to  contact  our  office.

Please  be  advised  that  it  is  a  misdemeanor  offense  to  be  collecting  Sales  Tax without  having your  Certificate  of  Authority  on  display  at  your  place  of business  and,  if  you  have  employees, you  must  also  have  your  Workers’ Compensation  and  Disability  Insurance  Certificates  displayed.

We  are  an  authorized  Quickbooks-Pro  Advisor  and,  as  such,  can  get  you  discounts  on  Quick-books,  Quickbooks  upgrades,  and  Quickbooks  supplies  directly  from  Quickbooks.   Our  contact  is Keith  Van  Order  and  his  direct  number  is  214-387-2840.   We  were  told  our  clients  would  receive a  30%  discount  when  they  mention  our  name.

We  now  have  a  Facebook  page  under  ” Michael J. Berger and Co. CPA’s, LLP ”

** Additional  information  will  be  posted  to  our  website:  www.bergercpa.com.

YEAR END MEMO – 2011

TO:         All Clients

DATE:   January 2012

*****************

FICA Tax Changes for 2012:

FICA Tax includes both Social Security coverage and Medicare coverage, and are both a deduction
from employee wages and matched by the employer.

Maximum Wages Subject to
Social Security Tax $ 110,100.00

Maximum Social Security Tax – Employers 6,826.20
Maximum Social Security Tax – Employees 4,624.20

Maximum Wages Subject to  Medicare Tax                        Unlimited

Social Security Tax Rate:
Employees                                                    4.20%
Employers                                                       6.20%

Medicare Tax Rate:
Employees  1.45%
Employers 1.45%

NYS  and  NJ  minimum  wage  is  $7.25  per  hour

The  MTA  Tax  has  been  repealed  as  of  04/01/2012,  for  most  employers.   Additional  information
will  be  posted  to  our  website:  www.bergercpa.com.

The  Federal  & State  agencies  have  been  aggressively  looking  for  ways  to  assess  taxes  &
penalties. Forms  1099  have  become  an  area  for  target.  All  payments  of  $600.  per  year  to  non-
corporate  entities  for  services  will  need  a  signed  and  completed  Form  W-9  on  file  so  we  can
complete  a  Form  1099  at  year  end. For  all  sales  that  are  exempt  from  sales  tax,  you  must
have  a  signed  resale  certificate  or  exemption  certificate  on  file  from  the  customer. <br>  If  you  need
any  forms  or  have  any  questions,  please  do  not  hesitate  to  contact  our  office.

Please  be  advised  that  it  is  a  misdemeanor  offense  to  be  collecting  Sales  Tax without  having
your  Certificate  of  Authority  on  display  at  your  place  of business  and,  if  you  have  employees,
you  must  also  have  your  Workers’ Compensation  and  Disability  Insurance  Certificates  displayed.

We  are  an  authorized  Quickbooks-Pro  Advisor  and,  as  such,  can  get  you  discounts  on  Quick-
books,  Quickbooks  upgrades,  and  Quickbooks  supplies  directly  from  Quickbooks.   Our  contact  is
Keith  Van  Order  and  his  direct  number  is  214-387-2840.   We  were  told  our  clients  would  receive
a  30%  discount  when  they  mention  our  name.

We  now  have  a  Facebook  page  under  ” Michael J. Berger and Co. CPA’s, LLP ”
** Additional  information  will  be  posted  to  our  website:  www.bergercpa.com.

YEAR END MEMO – 2010

To: All Clients
Date:   December  2010
*****************
FICA Tax Changes for 2011:
FICA Tax includes both Social Security coverage and Medicare coverage, and are both a deduction
from employee wages and matched by the employer.
Maximum Wages Subject to Social Security Tax $ 106,800.00
Maximum Social Security Tax  6,621.60
Maximum Wages Subject to Medicare Tax Unlimited  (UNCHANGED)
Social Security Tax Rate:
Employees 4.20%
Employers 6.20%
Medicare Tax Rate:
Employees 1.45%
Employers  1.45%
NYS  and  NJ  minimum  wage  is  $7.25  per  hour
** The  Federal  &  State  agencies  have  been  aggressively  looking  for  ways  to  assess  taxes  &
penalties.  forms  1099  have  become  an  area  for  target.  All  payments  of  $600.  per  year  to  non-
corporate  entities  for  services  will  need  a  signed  and  completed  form  W-9  on  file  so  we  can
complete  a  Form  1099  at  year  end.   All  sales  not  including  sales  tax  must  have  a  resale  certificate  or  exemption  certificate  on  file  from  the  customer.   If  you  need  any  forms  or  have  any
questions,  please  do  not  hesitate  to  contact  our  office.

** Please  be  advised  that  it  is  a  misdemeanor  to  be  collecting  Sales  Tax without  having  your
Certificate  of  Authority  on  display  at  your  place  of business  and,  if  you  have  employees,  you
must  also  have  your  Workers’ Compensation  and  Disability  Insurance  Certificates  displayed.

** We  are  an  authorized  Quickbooks-Pro  Advisor  and,  as  such,  can  get  you  discounts  on  Quick-
books,  Quickbooks  upgrades,  and  Quickbooks  supplies  directly  from  Quickbooks.   Our  contact  is
Keith  Van  Order  and  his  direct  number  is  214-387-2840.   We  were  told  our  clients  would  receive
a  30%  discount.