What you don’t know about tax changes for the 2014 tax year could cost you a lot of money.
“Every year the government reacts to the state of the economy and what voters are wanting,” says Nicole Cahoon, a local Certified General Accountant (CGA). “Knowing about the latest credits and cuts introduced last fall could save families hundreds of dollars.”
The most prominent change is the Family Tax Cut, which allows eligible couples with children living at home to transfer up to $50,000 of income from the higher-earning spouse to the lower-earning spouse. That change alone, says Cahoon, could save a family up to $2,000.
Other credits for families include an increase to the Child Fitness Credit – with the maximum amount of eligible fees now set at $1,000 per child – and an additional tax credit of $500 for a child with a disability. Tax-deductible adoption expenses have also increased to $15,000 per child.
The list of qualifying medical expenses for 2014 has been expanded to cover certain therapy plans for persons with disabilities, as well as costs for service animals. Cahoon adds that small business operators and owners of qualified farm and fishing properties will benefit from an increase to the lifetime capital gains allowance.
Local “unsung heroes” will also get a bit of compensation for their efforts this year in the form of a new credit for search and rescue, and firefighting volunteers.
“Qualified volunteers are entitled to claim a 15 per cent non-refundable tax credit based on an amount of $3,000, as long as they’ve performed at least 200 hours of eligible services in the year,” Cahoon said.
Because all credits and deductions have specific requirements that must be met, Cahoon recommends speaking with a professional accountant before filing your taxes – or save the headache and have an accountant prepare your tax return for you, which she says is the best way to ensure you benefit from all eligible deductions – this year and beyond.
“It’s our job to know the ins and outs of all the new amendments,” she said. “Unlike tax filing programs or basic tax preparers, CGAs have the knowledge, training and experience to offer advice for the future. It’s much more than just plugging in numbers to save money this year, it’s about looking at the big picture and finding ways to maximize returns over the long-term.”
For information about specific requirements of the new credits and deductions, or to find out more about personal and corporate tax returns, contact Cahoon at 250-871-1121 or www.nicolecahoon.com.