Perhaps nothing confuses you more than the ever changing tax laws. Tax laws are always changing even if it is just to keep up with inflation adjustments.
Some tax laws are tweaked every year, with few people, outside the tax profession, ever noticing. Provisions of tax laws that have been in place in past years are still being phased in, and there can be uncertainty about which tax breaks will be extended.
Here are some of the changes for 2015 that may affect you.
The health insurance penalty is ramping up significantly.
If you didn’t have health insurance in 2014, and you didn’t qualify for an exception to the penalty, the consequences weren’t so bad. You may have paid $95 per person or 1 percent of your household income, whichever was greater.
In 2015, you’ll pay $325 per person, or 2 percent of your household income, whichever is greater. That’s a steep increase.
Even if you qualify for one of the many exclusions, you may not know that some exceptions require you to apply for a certificate from the state or federal marketplace. You should do this in plenty of time so you have the required exemption certificate number when you prepare your return.
The IRS is cracking down on IRA rollovers.
It was an easy way to “borrow” retirement money for up to 60 days. Taxpayers could withdraw money from one IRA and wait up to 60 days before they moved it into another IRA. As of 2015, you can only do that once from an IRA in a 12-month period. If you want to move IRA funds using “trustee-to-trustee” transfers, you can still do that as often as you want.
Health Flexible Spending Accounts (FSAs) are subject to new rules.
The good news for people who don’t use all their FSA amounts by the end of the year was that as of 2013, they could roll over $500 from an FSA into the next plan year. Starting in 2015, the bad news is that as a result, they will be ineligible to participate in a Health Savings Account (HSA) for the year into which they rolled over an amount from a general purpose FSA.
While this is just a few of the changes, be sure to check with a tax professional regarding your unique situation.