Pages Navigation Menu

YourLifeDaily is dedicated to providing inexpensive, creative and resourceful ideas for enhancing the quality of life

banner

10 Tax Traps and Snares to Avoid in 2014

10 Tax Traps and Snares to Avoid in 2014

Taxpayers can ring in 2014 knowing that they don’t have to wait on Congress to finalize tax laws affecting their 2013 returns. The American Taxpayer Relief Act of 2012 that was finally enacted on Jan. 2, 2013, made many tax laws permanent and extended other provisions through 2013. But the tax-related celebrations are likely to be short-lived. Here are 10 tax traps you need to watch out for in 2014.

1. Get ready to wait early in the year.

The federal government shut down for 16 days last October, but taxpayers are still paying for it. The IRS says Jan. 31, 2014, is the earliest it will be ready to process individual tax returns. That date might even be pushed back to Feb. 4 in order for the agency to complete system updates and tests, which were interrupted by the shutdown. The IRS promises to make an official announcement of the filing season start date as soon as it knows for sure. You can go ahead and submit your return electronically as soon as you’re ready; your e-filer will hold it until the IRS is ready to accept returns. If, however, you file a paper return, the IRS encourages you to wait until Jan. 28 (or later) to mail it.

2. Get ready to wait later in the year.

Every year or so, some temporary tax provisions are renewed by Congress. In recent years, however, lawmakers have let the laws expire and then renewed them retroactively, most recently in the American Taxpayer Relief Act of 2012, also known as the “fiscal cliff” tax bill. Expect a replay in 2014. Fifty-five tax provisions expire on Dec. 31, 2013. This doesn’t affect your 2013 tax return, but tax planning for 2014 will be a different story. Consideration of extenders has been complicated by possible overall tax reform and budget considerations. Uncle Sam could bring in billions by letting some or all of the extenders fade away. That would mean, however, that individual taxpayers would lose such popular tax breaks as the itemized deduction for state and local sales taxes, the above-the-line deductions for tuition and fees and educators’ out-of-pocket classroom expenses. The consensus is that Congress will take up the extenders in 2014, but whether that will be before or after the Nov. 5 midterm election is unclear. The longer lawmakers wait, the harder it will be to plan and implement your 2014 tax strategy.

Leave a Comment

Your email address will not be published. Required fields are marked *

banner
banner
Rentals From $8.98 A Day 7 Major Car Vendors. Save Up To 40%
Skip to toolbar