2014 was a big year for health insurance, as it was the first year that Obamacare came into practice. These new health insurance requirement affected a majority of individuals, the health care industry, and federal personal income taxes. This requirment will be part of our annual tax disclosers for the foreseeable future.

Here are some essential things that have changed.

– The first is that you have to provide health insurance information when you are filing your personal income tax returns. This assits the government in confirm whether you needed to purchase heath insurance. If you where required to purchase it and didn’t you may face penalties if you don’t qualify for one of the available exemptions.

– The penalty is imposed on those who can afford health insurance but choose not to purchase it. In 2015, the penalty starts from $325 for each person in your household and $162.50 for each child under the age of 18. The maximum penalty for each family is $975. The other option is 2% of your annual household income, charged only on the amount of income that is above the tax filing threshold. The higher of the two options is chosen so you could potentially owe much more than $975 for not having coverage. The whole point of the penalty is to incentivise individuals to buy health insurance. At some point the penalty will be more than buying insurance. The penalty is paid as a part of your personal income tax.

– You must indicate whether you have had our health insurance coverage for a full year. Your penalty will be applied pro-rata for the number of months you didn’t have insurance (if greater than 2 consecutive months).

– For individuals that purchase health insurance through the State run exchange (i.e. Covered California), form 1095-A information needs to be filed annually as part of the health insurance disclosure. This form contains taxpayer infomation including: insurance provider, detailed monthly premiums paid and any subsidy recived (if any). Form 1095-A is mailed to taxpayers at the end of the calendar year.

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By Kristen Shaw

At The Huffington Post

Spoiler alert: The Affordable Care Act is the granddaddy of tax law changes this year. In fact, it's the largest single change to the tax code in 20 years. It's a complex one to dig into, so let's set it aside for now. Besides the ACA, there are a few interesting changes that could affect you when you file that 2014 tax return next year.

1. Pell Grants, Living Expenses and Education Credits

Many students, by default, will calculate their Pell Grant funds as being used to pay for qualified education expenses, because their college applies the grant for tuition. It isn't wrong, but that amount will decrease the expenses eligible to be used to claim an education credit like the American Opportunity Credit.

Instead, Pell Grants can now be allocated as living expenses, up to the full amount of actual living expenses — even if a student's college actually applied the Pell Grant to his tuition and fees. The amount will then count as taxable income, but it might be worth it to maximize the education credit. This complexity affects almost 9 million students. (Note: More resources on this are forthcoming from the IRS. It's also never a bad idea to consult with a tax professional on your specific situation, because this can get tricky.)

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The end of the year is fast approaching and it is really time to start thinking about saving up money by planning ahead for when your tax return is due. There are things that you can do before this time, and they may actually make a huge difference in whether you will have some spare cash for 2015.  You really need to start considering major deductions and key credits before that time.

Take out your Required Minimum Distributions or RMD. Start withdrawing from your IRA, if you have one, before the year ends. Here is the catch, you have to take out the RMD before April 1st or you can have a huge tax penalty of up to 50% on the amount that you should have taken out. If you have multiple IRA's then it is best if you withdraw from the one that is doing the best.

Start considering Roth Conversions. These are what will save your life, at least when it comes to taxes. Since a Roth IRA is a non-taxable account, you can in fact convert a traditional IRA into a Roth IRA, which will help to save you money in the long run.

Time to Maximize Your Retirement Contributions. This means you need to put as much as you can into your 401(k) both this year and next year. You will be able to defer the 401(k) and increase it. Yes, there are limits but if you aren't able to meet the maximum amount, try to contribute enough to receive a full match from your employer.

Itemize what you have. If you have been looking for a new job or have managed to move for a new job, if you itemize on your taxes you will be able to reduce your taxes by claiming resume printing, interview trips, moving expenses and other costs that are associated with a new job.

Charitable donations are your friends. You can donate a lot of different items such as cars, clothes, computers, stock and multiple other investments to any IRS approved charities and this will get you a deduction on your taxes.

Time to see the doctor. You can deduct medical expenses on your taxes, but there is a catch. They have to be 10% of your adjusted gross income or 7.5% if you are over 65. So, make a couple of doctors appointments, see a dentist, have your eyes checked out, buy some glasses and get some prescriptions filled.

Get some help with any college costs. If you happen to be in college or your children are and even if you have taken a special course in order to advance in your job, maximize any large credits. Pay enough fees and tuition to get a maximum credit of $2500 per student with the American Opportunity Credit. So you have maximized the credit this year, wait until 2015 to pay your college bills, if you can and get the maximum next year.

Your home expense will help. If you have a mortgage bill or property tax that you received in January, consider having it paid up by December. You can receive credits up to $500 for having a major environmental improvement such as solar panels placed on your home.

These are just a few tips that you can use to increase your income tax return yearly. There are plenty more out there that you can use, but these are the ones that will help you the most.

Tax Breaks for 2014

For those who are looking ahead to their 2014 tax returns, there are a number of tax breaks that will continue for this year. However, there are also tax breaks that have run their course and will not be available either.

Navigating your way through tax season takes a little research, effort and perhaps some assistance from your local Santa Barbara CPA. When it comes to Santa Barbara tax preparation, having the assistance of a proper CPA or tax attorney is always most welcome.

A Sample of Current Tax Breaks for 2014

Earned Income Tax Credit (EITC): One of the more popular tax credits, you must meet certain requirements in order for the EITC to occur. However, you must properly note the credit on your tax form in order to receive its benefits.

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The home office deduction provides a nice deduction for individuals who work from home. This is particularly helpful if you have a run a home based business. You can deduct a portion of your mortgage (or rent), utilities and other related expenses. The beauty of this is that you get to deduct a percentage of the items you have to pay anyway regardless of the business.

Seeing how the home office deduction can be so beneficial to taxpayers, the IRS pays close attention to these deductions – this deduction will increase your audit risk. However, this should not discourage you from taking the deduction if it is legitimate. The two major requirements that the IRS is looking for is 1. The home office must be used regularly and exclusively for business and 2. Your home office must be your principal place of business. If you meet these two requirements you can likely take the deduction.

To figure the deduction you must determine the square footage of your office (or business area) and divide that by the total square footage of your home. This will provide you with a percentage that you can use to calculate your deductions.

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You hear people talking about the Affordable Care Act, or “Obamacare” everywhere these days. Obamacare will affect most of us from 2014 and beyond. We are going to discuss the Obamacare penalties and examine the exemptions to the law.
Starting in 2014 everyone (without an exemption) will be required to have health insurance. In 2014 if you don’t obtain insurance you will be fined $95 (per person) or 1.0% of your income, whichever is greater *(with a cap explained in the note below). In 2015, this penalty increases to the greater of $325 or 2.0% of an individual’s annual income. In 2016 the penalty jumps to $695 per person or 2.5% of income. Beyond 2016, the fines will be indexed to the cost of living.
Note: the maximum annual penalty for all years is capped at three times the minimum penalty. An example – if you earn $30,500 in 2014, 1.0% of your income would equal $305 but the penalty is capped at $285 (3 times $95). These fines/penalties are due with an individual’s federal income tax return. So an Obamacare penalty for 2014 would generally be due by April 15, 2015.

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By Steve Vernon

​At CBS News.com

(MoneyWatch) The conventional wisdom when it comes to retirement planning is that your marginal income tax rate will be lower after you exit the workforce than when you were employed. This is the justification for contributing to 401(k) plans, IRAs and other retirement savings vehicles that defer taxes on your contributions and investment earnings until retirement.

On the other hand, many people think they’ll be in higher tax brackets in retirement, a viewpoint colored by the current debate in Washington about income taxes and the looming “fiscal cliff”. While I agree that the federal budget deficit needs attention and that there’s a good possibility that federal income tax rates will change, it doesn’t necessarily follow that most people’s income tax rates will be higher in retirement.

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