WHAT’S NEW FOR 2014 STATE TAX RETURNS?

The 2014 NJ state, and all of the 2014 NY state, forms and returns are now available at the websites of the respective tax agencies.  Click here for NJ and here for NY.

As I believe I said in a previous post, there appears to be no changes to the NY state forms – other than the fact that the standard deduction amounts have been adjusted for inflation and there is now a separate form for reporting addition and subtraction adjustments.

As for the NJ-1040 – the only things new for 2014 are the following -

(1) If you were a homeowner during 2014 you must now enter the Block and Lot, and, if applicable, Qualifier, Numbers, and the 4-digit “Municipal Code” (listed in the instruction book), for the property that you owned and occupied as your principal residence on December 31, 2014, along with the property taxes paid (not new), on the bottom of Page 2 of the NJ-1040.  If you were not a homeowner on December 31, enter the information for the last home you owned and occupied during the year.  If you were a tenant there is no need to make any entries on the new lines 37(b) and 37(c).

(2) If your paid preparer is required to file all returns electronically, but you want to file a paper return, you can “opt-out” of electronic filing by enclosing Form NJ-1040-O, E-File Opt-Out Request Form, with your paper return. Both you and your preparer must sign the form, and your preparer must fill in the oval above his or her signature on your return to indicate that Form NJ-1040-O is enclosed.

Since the only way I can submit NJ-1040s electronically is via the NJWebFile system, as I do not, and will never, use flawed and expensive tax preparation software, and there are a lot of restrictions that forbid me from using this system for many returns, I guess I will be signing a lot of NJ-1040-O forms this season.

I have taken a look at the eligibility requirements for using NJWebFile for 2014, and, with the exception of increasing the maximum number of W-2s you can report, it appears that most of the previous restrictions still remain.  Perhaps most important – you cannot use NJWebFile if you are claiming a credit for excess FLI insurance contributions.  Why, I have no idea.  I guess NJDOT is too cheap to pay to have someone fix the software.

I thought the Director had said that taxpayers could submit the “filled-in” 2014 Form NJ-1040 available at the NJDOT website “electronically” – but this is not discussed on the website.  I guess I will need to wait until actually preparing a 2014 NJ-1040 using the “filled-in” option to see if this can be done.

Something else new -

“Paper copies of New Jersey Tax forms are not available at public sites such as libraries or post offices. Public libraries that offer computer access may allow patrons to download/print forms from this website.  Because all forms are available on this site and can be photocopied, multiple copies of any form will not be provided, regardless of whether the request is made by email, calling the Customer Service Center, or by visiting a Division of Taxation Regional Office.” 

 

I will let you know if there is anything else new for the 2014 NJ-1040 as, or if, more information becomes available. 

TTFN

WHAT’S NEW FOR THE 2014 FORM 1040?

This post is not concerned with the various annual inflation adjustments to deductions and credits that are reported on Form 1040.  You can find that information here.  What I want to talk about is the physical changes to the actual 1040 form.

Except, of course, for the identification of the year, Page 1 of the 2014 Form 1040 is exactly the same as Page 1 of the 2013 Form 1040.  Both 1040s have the same 37 lines.

What changes there are appear on Page 2.  The 2014 Form 1040 has a total of 79 lines, as opposed to the 77 on the 2013 Form 1040.

Line 46 of the 2014 version is where you would report any “Excess advance premium tax credit” from new Form 8962. 

If your actual 2014 income was more than the 2014 estimated income used to determine the advance payments of the Affordable Care Act created Premium Tax Credit that were applied to the monthly health insurance premiums for coverage you purchased through the ACA Marketplace, the advance payments may have been more than the credit to which you are entitled.  If this is the case you must pay back the excess credit.  You enter the excess credit amount on Line  46.  An entry on this line will increase your total tax liability.

Line 61 of the 2014 Form 1040 is where you indicate whether or not you had ACA-compliant “Full-year coverage” (if you did you would check the box), and where you would report any “individual responsibility” penalty for not being properly covered.  An entry on this line will increase your total tax liability.

Line 69 of the 2014 return is where you would report any additional “net premium tax credit” to which you are entitled, also from Form 8962. 

If the credit to which you are entitled based on actual 2014 income is more than the advance payments received during the year you can claim the additional amount of the credit.  This credit is refundable.  Like the Earned Income Credit, the Premium Tax Credit, net any advance payments, is treated like additional tax withholding.  An entry on this line will reduce the amount due to Uncle Sam or increase your refund.  

Although there are 3 new lines for 2014, there are, as I explained above, only 2 new lines on the actual return.  Line 67 on the 2013 Form 1040 was identified as “Reserved” and was not used.  The instructions for the 2013 Form 1040 said of Line 67 - 

“This line has been reserved for future use”.

As of this writing the 2014 Form NJ-1040 has not yet been posted to the NJ Division of Taxation website.

And as for New York state returns, the NY State website tells us -

“The following forms for tax year 2014 will not be available until late January:

• IT-201, Resident Income Tax Return (instructions)

• IT-203, Nonresident and Part-Year Resident Income Tax Return (instructions)

• IT-214, Claim for Real Property Tax Credit (instructions)

• NYC-208, Claim for New York City Enhanced Real Property Tax Credit - For Homeowners and Renters (instructions)

• NYC-210, Claim for New York City School Tax Credit (instructions)

• IT-201-X, Amended Resident Income Tax Return (instructions)

• IT-203-X, Amended Nonresident and Part-Year Resident Income Tax Return (instructions)”

This Saturday I will be attending the annual “Famous State Tax Seminar” offered each January by the NJ chapter of NATP.  I will post my “review” of this seminar, and any new items of interest, here next week.

TTFN

2014 INFLATION-ADJUSTED NUMBERS

The IRS has released many of the inflation-adjusted numbers for deductions, credits, phase-outs, and rates that will be in effect for tax year 2014.

I listed many of these changes in "What's New for Federal Income Taxes for 2014" at Mainstreet.com. 

Here are some more 2014 numbers –

• The Adjusted Gross Income (AGI) phase-out range for the Lifetime Learning Credit is $54,000 to $64,000 for all unmarried filers, and $108,000 to $128,000 for married couples filing a joint return.  This credit is not available on separate returns.

• The AGI phase-out range for the student loan interest deduction is $65,000 to $80,000 for all unmarried filers, and $130,000 to $160,000 for married couples filing a joint return.  The credit is not available on separate returns.  The maximum deduction remains at $2,500.

• The AGI limit for the Retirement Savings Contribution Credit is $30,000 for Single, Married Filing Separate and Qualifying Widow(er) filers, $45,000 for Head of Household, and $60,000 for Married Filing Joint.

• Individuals and couples cannot claim an Earned Income Credit if the total investment income reported on the 2014 Form 1040 exceeds $3,350.  Investment income includes taxable, and tax-exempt, interest and dividends, rent and royalty income, capital gain net income, and net passive activity income.

• The foreign earned income exclusion is $99,200.

• And, for those who are interested, the tax “on the first sale by the manufacturer, producer, or importer of any shaft of a type used in the manufacture of certain arrows is $0.48 per shaft”.

There is no word whether the idiots in Congress will extend the various tax benefits that are scheduled to expire on 12/31/2013, which include –

•   the $250 above-the-line deduction for qualified expenses of K-12 educators;

• the above-the-line deduction for up to $2,000 or $4,000 of qualified tuition and fees;

• the itemized deduction for mortgage insurance premiums;

• the option to claim an itemized deduction for state and local general sales taxes instead of state and local income taxes;

• the $500 lifetime maximum credit for qualified energy efficient improvements to a taxpayer's principal residence;

• the ability to make a direct tax-free transfer from an IRA to a charity and apply this as a Required Minimum Distribution; and

• the exclusion from income of the discharge of qualified principal residence debt.

It is possible that the idiots in Congress will, as usual, extend some or all of these expiring breaks for another year as part of the budget process.  But, again as usual, we will not know until the very last minute.

I wish the idiots in Washington would finally decide to either make permanent the deserving among the “tax extenders”, as they did with the “Bush tax cuts”, or let them all expire for good.  What sense is there in temporarily extending these tax breaks year after year?  But then who said these idiots had any sense?

Of course all the 2014 numbers I have discussed here and at the MainStreet.com Tax Center assume current tax law does not change.  Dave and Max (Camp and Baucus) have been touting tax reform all year, promising to enact substantive reform legislation before the end of 2013, but have actually done nothing of consequence to bring about the promised reform.  To be perfectly honest, it is too late now to do anything.

I expect that there will be some token tax changes, probably adding more complexity to the Code, included with extending the expired breaks in the final last minute budget bill.

But, sadly, there will be no tax reform in 2013.  Or, again sadly, not in 2014 either.

TTFN