B J Kang Law PC
  • HOME
  • PEOPLE
  • SERVICES
    • KIC SV Sample Documents
  • CONTACT
  • PERSPECTIVES
  • Careers

Our Perspectives

What's new in 2015: individual tax 

1/9/2015

 
Since 2015 is upon us, our firm feels that now is a good  time  to begin looking at some of the most significant new tax breaks, penalties, and restrictions that will affect taxpayers this year. This week we will mention some of the biggest changes that individual taxpayers will face in the upcoming year. 

The good news is that any changes individuals will face coming year come in the form of minimal increases to tax rates, and related tax thresholds, which have changed slightly due to 2015 inflation adjustments. There are, however, two significant tax changes, a restriction and a penalty, that individuals must be aware of in 2015.

The first major change is a new restriction imposed on individual taxpayers regarding the amount of times that they can make a tax free rollover of one IRA into another IRA in any 12-month period.1 Previously, taxpayers were able to make as many tax free withdrawals of money from their IRA as long as they: (i) replaced the amount that was withdrawn into another eligible retirement plan within 60 days of the initial withdrawal, and (ii) had not made a previous rollover, with regards to the same IRA, within the previous 12 months.

Since the tax free rollover rule was allowed on an account-by-account basis, individuals, effectively, could make unlimited interest-free loans to themselves as long as they were rolled over different IRA accounts and repaying the money within 60 days. Beginning in 2015, however, the “one rollover per 12-month rule” now applies to all IRAs owned by a taxpayer.2

The second major change that individuals taxpayers now face is the penalty for not having health insurance as mandated in the Affordable Care Act (the “ACA”). Prior to this New Year, individuals who did not have health insurance were subject to the following penalty: (i) 1% of the head of household’s annual income; or (ii) $95 per person, whichever amount was greater. Now, however, the penalty for a lack of health care coverage has increased to the greater of: (i) 2% of the head of household’s annual income; or (ii) $325 per person.3 These changes represent a significant increase in the applicable penalty that an individual will face for not being insured -- especially when compared with the generally nominal inflation-adjusted increase of most US tax breaks.

1Internal Revenue Service Announcements 2014-15 and 2014-32.
2Bobrow v. Commissioner, T.C. Memo. 2014-21.
3Congressional Research Service, Individual Mandate Under ACA, p.3.


Comments are closed.

    Categories

    All
    Business Immigration
    Business Planning And Corporate Transactions
    Federal And State Tax Planning
    International Tax


    Authors


    ​B.J. Kang JD, CPA
    Josh Portman JD, LL.M
    Habeeb Syed JD
    Nora Ji Li LL.M
    Nathaniel S. Johnson

    Archives

    December 2022
    February 2021
    January 2021
    November 2020
    March 2020
    April 2019
    April 2018
    February 2018
    January 2018
    October 2017
    September 2017
    July 2017
    January 2017
    October 2016
    September 2016
    January 2016
    December 2015
    October 2015
    June 2015
    March 2015
    January 2015
    November 2014
    October 2014
    September 2014
    August 2014
    July 2013



    DISCLAIMER:
    The information contained on this web-site is not legal advice. The information may not reflect the most up-to-date legal developments.  Unless otherwise indicated in writing, any US federal tax advice contained in this web-site is not intended to be used, and cannot be used to (i) avoid penalties under the US Internal Revenue Code, or (ii) promote, market or recommend to another party any matter addressed herein.

    RSS Feed

 
3135 Mount Vernon Ave., Alexandria, VA 22305 
3003 N. First St., San Jose, CA 95134 (CA Branch: KIC-SV)
Harvard Sq., 1 Mifflin Pl., STE 400, Cambridge, MA 02138 (MA Branch)
Telephone : 703-595-2836 Fax : 703-722-9168
Copyright © 2021 B.J. Kang Law, PC. All rights reserved.