More On Tax Planningfrom The Advisor's Professional Library
- IRAs: In General Individual Retirement Accounts are highly popular tools for contributing funds that grow on a tax deferred basis. Depending on the type of IRA, the accumulation can be tax free.
- Health Insurance: Health and Medical Savings Accounts A Health Savings Account is a trust created exclusively for the purpose of paying qualified medical expenses of an account beneficiary. Although they are popular, they are not without their pitfalls and the regulations can be complicated. Learn more about how to avoid federal taxation on the accumulation and distributions of HSA.
Tax experts warned advisors to be aware of the 57 federal tax provisions that expired at year end, which include the deduction for state and local sales tax, the above-the-line deduction for tuition and tax-free distributions from IRAs for charitable purposes.
The “on-again, off-again nature of expiring provisions creates a lot of uncertainty,” said Jeff Porter, chairman of the American Institute of Certified Public Accountants’ tax executive committee, on a recent call with reporters.
Edward Karl, vice president of taxation for the AICPA, noted on the call that there was little “impetus in Congress to move a separate extenders bill” by year end, even though AICPA would like to see one.
The extenders—a term that is interchangeable with expiring provisions—“for this year won’t impact filing season, but will impact decision making,” Karl said.
Melissa Labant, director of AICPA’s tax advocacy, said on the call that practitioners should gear up for yet “another difficult filing season” in 2014.
Last winter, Labant said, “we had late congressional action and a late start to filing season, then we had a 16-day government shutdown during October filing season, which meant CPAs were unable to talk to anyone at the IRS during one of our busiest times of the year.”
As it stands now, she continued, “we’re looking at a one- or two-week delay in the upcoming filing season. I would strongly urge the IRS to start the filing season as early as possible.”
Workload compression, Labant continued, “is already a challenge for our profession today, and I’m concerned that a government shutdown in January, even if only for a day or two, may push back the already delayed start to filing season.”
Said Labant, “Hopefully the IRS is anticipating and preparing now for a possible government shutdown in January, just in case.”
In October, the IRS announced that filing season would be delayed at least a week, starting Jan. 26, but possibly two weeks, until Feb. 4.