(773) 930-3788 intisar@featchicago.com

Dear Clients:
Thank you for giving me the opportunity to serve you. I hope that you were able to enjoy summertime.

The remaining of this year will quickly slipway and I’d like to remind you that the 2014 tax season is right around the corner, it is not too early to begin planning.

As a taxpayer, you have the right to pay the lowest legitimate tax. Given that the lawmakers decided to allow numerous tax breaks to expire after 2013, it is on you to begin gathering your 2014 related tax documents to benefit from the remaining few tax breaks that are available to minimize your taxable income & maximize your allowable deductions/ credits.

As your professional tax preparer, I have the responsibility to see that your right is protected while operating within the framework of tax laws & regulations. To assist you in planning, by the end of this week, I will send individual letters accompanied with the client tax organizer to each individual on record. My letter will be send via secured email for your safety and I will supply you with a password and instructions for access.

To all taxpayers, clients or not, please beware that identity theft and refund fraud is a top priority to the IRS and to your professional tax preparer. The IRS assigned more than 3000 employees to work on identity theft. Also, in an effort to combat fraud and identity theft, new IRS procedures effective in January 2015 will limit to three (3) the number of refunds electronically deposited in a single financial account or pre-paid debit card. The fourth and subsequent refunds automatically will convert to a paper refund check and be mailed to the taxpayer. The direct deposit limit will prevent criminals from easily obtaining multiple refunds. The new limitation will also protect the taxpayers from unprofessional and unethical preparers who obtain payment for their tax preparation services by part or all of their clients refund into the preparers‘ own bank accounts. A handful of those tax preparers face penalties and many of them lost their authority to practice.

For now, I’d like to highlight some of 2014’s tax rules, which may affect individual taxpayers:

  • Health reform change tops the list: In general, individuals without insurance may owe a tax. Taxpayers must have a qualifying coverage for themselves and their dependents to avoid the tax. Individuals for whom coverage is too expensive are exempt from the tax. Also taxpayers without coverage for a period of less than three months and those who can show that a hardship forced them to go without coverage are exempt. Lower income individuals get a refundable tax credit to help them afford coverage.
  • Good news for same-gender married couples: New rules apply if the couple was legally married in a state or foreign country that recognizes same-gender marriage. Taxpayer and spouse generally must use a married filing joint return status. This is true even if the couple now lives in a state or foreign country that does not recognize same-gender marriage.
  • The social security wage base increases to $117,000. The tax rates imposed on employers and employee remain the same, but the 0.9% Medicare surtax kicks in for singles with wages exceeding $200,000 and for couples earning over $250,000. Self-employed taxpayers are also subject to the surtax. The surtax doesn’t affect the employer’s share.
  • U.S. taxpayers working abroad have a slightly larger exclusion. This year it will be $99,200.
  • The student loan interest deduction begins to phase out when the taxpayer adjusted gross income exceeds $130,000 for couples and $65,000 for single tax filers.
  • The lifetime learning credit starts phasing out at $64,000 of AGI for singles and at $128,000 of AGI for couples.
  • The income tax brackets for this year are wider than for 2013 due to the increase in inflation, but the tax rates remain the same.
  • The standard deduction rises a little for 2014. High-income tax filers lose their itemized deductions above a higher level for 2014. Personal exemptions increase to $3,950 for filers and their dependents, but the personal exemption is phased out for upper-income filers.
  • The 20% top rate on dividends and long-term gains starts at a higher level for 2014 for filers with taxable income above the threshold depending on their filing status. The regular 15% maximum rate applies for filers with incomes below the threshold amounts.
  • The alternative minimum tax exemptions are increasing for 2014: $82,100 for married filing joint returns, $52,800 for both singles and head of household.

As I mentioned above, I will send my next letter to individual clients addressing specific tax rules and regulations applicable specifically to each taxpayer based on the information available from last years tax returns. Then I will be happy to assist further in the planning once I receive the client’s organizer with the new information and status changes, if any. To schedule a meeting or conference call, I strongly recommend clients complete the application form to request an appointment or email me at intisar@featchicago.com. Also, clients may contact my office at (312) 208-9585, or me directly at (773)401-2848.

Yours very truly,
Intisar Assaf
F & E Accounting and Tax Service, L.L.C
203 N LaSalle Street, Suite 2100
Chicago, IL 60601