As tax services Orlando experts we know that Inflation is a serious financial threat that has gripped this country. Prices are rising higher and your purchasing power is decreasing, making it difficult to make both ends meet. No matter what market, industry, sector or aspect you consider, inflation has a negative influence.
However, for taxes, the influence is not that bad. In fact, this is one area in which the government does good. Every year, inflation is factored into the picture and taxes are adjusted. What do you get out of this? Lower tax bills, which can help you in saving money. Hire qualified tax services Orlando and you can decrease these even more.
Here is how inflation is going to affect the taxes in 2014.
The standard deduction allows you to reduce your taxable income, decrease you tax and not go through the hassle of itemizing your deductions. In the year 2014, deduction for single filers has increased by $100 and is now at $6,200. For joint filers, there is an increase of $200 and the new values are $12,400. For head of the family, the standard deduction amount is $9,100.
The new figures mean you can anything from $10 to $80 on your taxes. The exact amount varies with your filing status and income levels.
Every tax payer can take a personal exemption for their dependants, which are usually, but not necessarily, their family members. In 2014, the personal exemption amount is $3,950 which is an increase by $50. This can provide you with tax savings between $5 and $20 for every dependant.
There is a slight loop with personal exemptions that you should know about. If your income is above a certain level, you will be provided with reduced exemptions. Your tax services Orlando can guide you more about this.
Every year, the tax brackets are modified by considering the effect of inflation. This means your income can rise, but you will still be able to avail a lower tax rate.
As an example, if you are a single filer, you will notice that the upper bracket of tax now lies to $9,075 instead of $8,925. This range is for the 10$ tax rate. For 12% rate, the range is now modified to $36,900, whereas previously it was $36,250.
Since even a bigger income will now be taxed at a reduced rate, you can enjoy better tax savings. As an example, if you earn around $40,000 and are a single filer, you can save over $70 in taxes. Those people whose incomes are higher or those who file jointly will be able to save bigger amounts.
Earned Income Tax Credits
If your income is not that high, you can easily avail the Earned Income Tax Credit. For joint filers, this amount is $99 if there are three children. For two children, a credit amount of $88 can be availed. For one or no children, the amounts are $54 and $9 respectively.
Last Minute Tax Problems
Taxpayers have to face two types of problems: flubs and quagmires. Flubs are those issues that involve penalties and interests. Do not like the sound? You will just get a smaller refund them. The second type are those problems that require a lot of time, energy and money.
At times, these tax problems occur just by themselves and at times, it is because of your mistakes. Hire a reputed tax services Orlando, and you will be able to avoid them. Still you should know about them so that you can protect yourself accordingly.
The IRS states identify theft is happening in large numbers and there are so many tax payers that have fallen a victim to this. In the last year, the IRS had to issue 250,000 special codes so that these individuals could verify their identities. As for this year, the number has already crossed 770,000.
Most of these thefts are because social security cards were stolen from wallets, snatched on the road and the like. However, thieves have also become smarter and now are trying to get these numbers from databases of organizations that have these records.
If you are a victim, the first sign an e-file return that gets rejected and a letter from the IRS that states its filters did not allow procession of a suspicious refund.
Though you cannot prevent identity theft completely, you should at least take the basic measures and try to keep the information safe. Do not carry your cards on you, do not give your details to anyone you cannot trust and do not replay to suspicious emails.
Not declaring a foreign account
The government is doing its best to prevent offshore cheating and so has tough consequences if taxpayers do not abide with the policies on foreign accounts. Ask your chosen tax services Orlando to guide you more about these so that you do not land into any sort of trouble.
There is form for this which has to be submitted prior to the 30th of June. You will need this form only if the value of your accounts is more than $10,000. Should you not file, the penalty charged will be so high that it can even be more than the money in your accounts.
No matter what you do, if your income is above a certain level you have to pay taxes. There is just no way out. You may think that by not filing you will be keeping yourself safe, but that is not so. IRS is going to catch you, and till that time excessive interests and penalties will have accumulated.
Not opening IRS mails
All those people who did not open IRS emails in a timely manner and ignored their notices will have to go through a tough time. They might either face trouble with their property or have problems at the bank, both of which will bring down their credit scores. Still, if you do not have enough time or delay checking your mail, ask your chosen tax services Orlando to keep you updated.
If you need more information about our Orlando accounting and tax services, please contact us at 407-502-2400. Freedomtax Accounting’s staff has been providing honest accounting services and tax services for 15 years. Our Orlando accounting and tax firm has its main offices in Kissimmee, FL. Our services are provided nationwide, but mainly in the Central Florida market to areas like Orlando, South Orlando, Kissimmee, St. Cloud, Poinciana, Clermont, Davenport, and Hunters Creek, FL. Our tax accountants and IRS enrolled agents (irs ea) specialize in corporate accounting and bookkeeping, tax services, tax preparation, back taxes help, tax debt relief, tax resolution, tax planning, itin numbers, incorporations, and non profit 501c3 tax exempt status applications.
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