Important Tax Issues to Watch For in 2014

By David S. Chang

To avoid headaches and penalties, mark your calendar with the following key dates.

January 15, 2014

  • 4th Quarter 2013 Estimated Tax Payment Due. If you are self-employed or have other fourth-quarter income that requires you to pay quarterly estimated taxes, get them postmarked by January 15, 2014.

April 15, 2014: 

  • 2013 Individual Tax Returns Due
  • Individual Tax Return Extension Form Due. If needed, file your request for an extension by April 15 to push your deadline back to October 15, 2014.
  • 1st Quarter 2014 Estimated Tax Payment Due
  • Last Day to make a 2013 IRA Contribution. If you haven’t already funded your retirement account for 2013, do so by April 15, 2014. That’s the deadline for a contribution to a traditional IRA, deductible or not, and a Roth IRA. However, if you have a Keogh or SEP and you get a filing extension to October 15, 2014, you can wait until then to put 2013 money into those accounts.

June 15, 2014

  • 2nd Quarter 2014 Estimated Tax Payment Due

September 16, 2014

  • 3rd Quarter 2014 Estimated Tax Payment Due

October 15, 2014

  • Extended Individual Tax Returns Due. If you got an extension on your 2013 tax return, you need to have it postmarked by October 15, 2014.
  • Last Chance to Recharacterize 2013 Roth IRA Conversion. If you converted a traditional IRA to a Roth during 2013 and paid tax on the conversion with your 2013 return, October 15, 2014 is the deadline for recharacterizing (undoing) the conversion. 

Overview of Important Tax Issues for 2014:

Complications from the October 2013 government shutdown mean that the start of the 2014 tax season will be delayed. According to the IRS, the 2014 season is slated to start between Jan. 28 and Feb. 4, 2014. The filing deadline of April 15 will remain the same.

Healthcare Reform:

2014 will see major changes to healthcare in the U.S. Beginning in 2014, all Americans will be required to maintain health insurance and the IRS is responsible for monitoring compliance.

  • Starting in 2014, your W2 will report the value of your health plan to the IRS. This key figure will determine whether you are eligible for tax credits or penalties. You will not need to report this number as income on your tax return.
  • Taxpayers without health insurance (or coverage under someone else’s policy) will be assessed a penalty starting at $95 or 1% of income (whichever is greater) in 2014. This penalty will rise each year until it reaches 2.5% of income or $695 per person in 2016.

Free Tax Return Preparation for You by Volunteers

The IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) Programs offer free tax help for taxpayers who qualify.

VITA
The VITA Program generally offers free tax help to people who make $51,000 or less and need assistance in preparing their own tax returns. IRS-certified volunteers provide free basic income tax return preparation with electronic filing to qualified individuals in local communities. They can inform taxpayers about special tax credits for which they may qualify such as Earned Income Tax Credit, Child Tax Credit, and Credit for the Elderly or the Disabled. VITA sites are generally located at community and neighborhood centers, libraries, schools, shopping malls, and other convenient locations.

TCE
The TCE Program offers free tax help for all with priority assistance to people who are 60 years of age and older, specializing in questions about pensions and retirement issues unique to seniors. IRS-certified volunteers who provide tax counseling are often retired individuals associated with non-profit organizations that receive grants from the IRS.

Self-Help Tax Preparation
In addition to traditional face-to-face tax preparation, the IRS is offering a self-assistance service at many VITA and TCE locations. If individuals have a simple tax return and need a little help or do not have access to a computer, they can visit one of the participating tax preparation sites and an IRS-certified volunteer will guide them through the process.

Find a VITA Site Near You
There are thousands of VITA sites located across the country. You may find a site near you between January and April using the VITA Locator Tool or call 1-800-906-9887.

Find a TCE or AARP Tax-Aide Site Near You
A majority of the TCE sites are operated by the AARP Foundation’s Tax Aide Program. To locate the nearest TCE site or AARP Tax-Aide site between January and April use the AARP Site Locator Tool or call 888-227-7669.

Items You Need to Bring
To have your tax return(s) prepared at a VITA or TCE site you need to bring the following information with you:

  • Proof of identification – Picture ID
  • Social Security Cards for you, your spouse and dependents or a Social Security Number verification letter issued by the Social Security Administration or
  • Individual Taxpayer Identification Number (ITIN) assignment letter for you, your spouse and dependents
  • Proof of foreign status, if applying for an ITIN
  • Birth dates for you, your spouse and dependents on the tax return
  • Wage and earning statement(s) Form W-2, W-2G, 1099-R, 1099-Misc from all employers
  • Interest and dividend statements from banks (Forms 1099)
  • A copy of last year’s federal and state returns if available
  • Proof of bank account routing numbers and account numbers for Direct Deposit, such as a blank check
  • Total paid for daycare provider and the daycare provider’s tax identifying number (the provider’s Social Security Number or the provider’s business Employer Identification Number) if appropriate
  • To file taxes electronically on a married-filing-joint tax return, both spouses must be present to sign the required forms.

It is extremely important that each person use the correct Social Security Number. The most accurate information is usually located on your original Social Security card. If you do not have an SSN for you or a dependent, you should complete Form SS-5, Social Security Number Application. This form should be submitted to the nearest Social Security Administration Office.

If you or your dependent is not eligible to get a Social Security Number, you may need an Individual Taxpayer Identification Number (ITIN).

David S. Chang

Award-Winning Entrepreneur, Wealth Manager and CEO | Chief Editor, Author, Keynote Speaker, Consultant ArtofThinkingSmart.com | Political Consultant | Army Officer National Guard | Living To Fulfill Needs, Solve Problems, and Live Passionately!

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