The Internal Revenue Service Advisory Council(IRSAC) Releases 2014 Annual Report

WASHINGTON –– The Internal Revenue Service Advisory Council held  its annual public meeting today and released its annual report, which includes recommendations on a wide range of tax administration issues.

“We appreciate the hard work that these dedicated, civic-minded volunteers bring to tax administration,” said IRS Commissioner John Koskinen. “The members provide both practical and creative advice, providing an important perspective for the IRS as we look for ways to improve our operations. We will study their recommendations closely.”

IRSAC is an advisory group to the entire agency. IRSAC’s primary purpose is to provide an organized public forum of relevant tax administration issues for the Commissioner, senior IRS executives and representatives of the public to discuss relevant tax issues.

IRSAC members convey the public’s perception of professional standards and best practices for tax professionals and IRS activities; offer constructive observations regarding current or proposed IRS policies, programs, and procedures; and suggest improvements to IRS operations.

Based on its findings and discussions, IRSAC made several recommendations on a broad range of issues and concerns including IRS funding, as well as topics identified by subgroups covering the Office of Professional Responsibility and Large Business and International, Small Business/Self-Employed and Wage and Investment operating divisions.

IRSAC is administered by the National Public Liaison Office. IRSAC draws its members from the tax professional community and members of academia.

The 2014 Internal Revenue Service Advisory Council Public Report is available at IRS.gov.

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__IRS_Announces_New_Members_for_ETAAC?=

WASHINGTON — The Internal Revenue Service today announced the selection of three new members and a chairman to the Electronic Tax Administration Advisory Committee (ETAAC).

ETAAC provides an organized forum for discussion of issues in electronic tax administration and supports the goal of increasing electronic transactions between tax professionals and the IRS.  

The new members are:

  • Kevin A. Richards of Springfield, Ill., is the manager of the Electronic Commerce Division at the Illinois Department of Revenue. Richards, who is in his 25th year at the department, has managed the Electronic Commerce Division for the last 16 years. The Electronic Commerce Division is responsible for the development, marketing, implementation and management of the electronic filing and payment programs at the department, including both individual income tax and business tax applications.  The Electronic Commerce Division also encompasses the Electronic Funds Transfer Office and all cash management operations at the Illinois Department of Revenue.  In fiscal year 2014, the Electronic Commerce Division oversaw the processing of more than 16 million electronic returns and payments totaling over $36 billion in deposits.  Richards is also the president of the local chapter of the Association of Government Accountants.
  • Stephanie Salavejus of Newport News, Va., is vice president with Peninsula Software (PenSoft). Salavejus is responsible for software solutions and product requirements for clients. She has 28 years of experience in electronic filing of tax reports and the development of software and is a member of the American Payroll Association and the National Association of Computer Tax Processors.    
  • Kelli Wooten of Boston is a director with Markit | CTI Tax Solutions and of counsel for Burt, Staples & Maner LLP. She advises clients on information reporting and withholding issues for the Foreign Account Tax Account Compliance Act (FATCA). Wooten also develops processes and procedures for completing and e-filing the new Form 8966 as well as Forms 1042-S and 1099.

The new chairman is:

  • Jim Buttonow of Greensboro, N.C., has been elected by the members to serve as the Chairman of ETAAC for 2014-2015. Buttonow currently directs tax practice and procedure services for H&R Block. He is a CPA, author and instructor in tax administration.

Each June, the ETAAC submits a report to Congress reporting on the progress of the IRS’s electronic tax initiatives.  ETAAC was created in 1998 by the IRS Restructuring and Reform Act of 1998 (RRA 98).

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WASHINGTON — Low- and moderate-income workers can take steps now to save for retirement and earn a special tax credit in 2014 and years ahead, according to the Internal Revenue Service.

The saver’s credit helps offset part of the first $2,000 workers voluntarily contribute to IRAs and 401(k) plans and similar workplace retirement programs. Also known as the retirement savings contributions credit, the saver’s credit is available in addition to any other tax savings that apply.

Eligible workers still have time to make qualifying retirement contributions and get the saver’s credit on their 2014 tax return. People have until April 15, 2015, to set up a new individual retirement arrangement or add money to an existing IRA for 2014. However, elective deferrals (contributions) must be made by the end of the year to a 401(k) plan or similar workplace program, such as a 403(b) plan for employees of public schools and certain tax-exempt organizations, a governmental 457 plan for state or local government employees, or the Thrift Savings Plan for federal employees. Employees who are unable to set aside money for this year may want to schedule their 2015 contributions soon so their employer can begin withholding them in January.

The saver’s credit can be claimed by:

  • Married couples filing jointly with incomes up to $60,000 in 2014 or $61,000 in 2015;
  • Heads of Household with incomes up to $45,000 in 2014 or $45,750 in 2015; and
  • Married individuals filing separately and singles with incomes up to $30,000 in 2014 or $30,500 in 2015.

Like other tax credits, the saver’s credit can increase a taxpayer’s refund or reduce the tax owed. Though the maximum saver’s credit is $1,000, $2,000 for married couples, the IRS cautioned that it is often much less and, due in part to the impact of other deductions and credits, may, in fact, be zero for some taxpayers.

A taxpayer’s credit amount is based on his or her filing status, adjusted gross income, tax liability and amount contributed to qualifying retirement programs. Form 8880 is used to claim the saver’s credit, and its instructions have details on figuring the credit correctly.

In tax year 2012, the most recent year for which complete figures are available, saver’s credits totaling $1.2 billion were claimed on more than 6.9 million individual income tax returns. Saver’s credits claimed on these returns averaged $215 for joint filers, $165 for heads of household and $127 for single filers.

The saver’s credit supplements other tax benefits available to people who set money aside for retirement. For example, most workers may deduct their contributions to a traditional IRA. Though Roth IRA contributions are not deductible, qualifying withdrawals, usually after retirement, are tax-free. Normally, contributions to 401(k) and similar workplace plans are not taxed until withdrawn.

Other special rules that apply to the saver’s credit include the following:

  • Eligible taxpayers must be at least 18 years of age.
  • Anyone claimed as a dependent on someone else’s return cannot take the credit.
  • A student cannot take the credit. A person enrolled as a full-time student during any part of 5 calendar months during the year is considered a student.

Certain retirement plan distributions reduce the contribution amount used to figure the credit. For 2014, this rule applies to distributions received after 2011 and before the due date, including extensions, of the 2014 return. Form 8880 and its instructions have details on making this computation.

Begun in 2002 as a temporary provision, the saver’s credit was made a permanent part of the tax code in legislation enacted in 2006. To help preserve the value of the credit, income limits are now adjusted annually to keep pace with inflation. More information about the credit is on IRS.gov.

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__In_2015,_Various_Tax_Benef?= =?US-ASCII?Q?its_Increase_Due_to_Inflation_Adjustments?=

WASHINGTON — For tax year 2015, the Internal Revenue Service announced today annual inflation adjustments for more than 40 tax provisions, including the tax rate schedules, and other tax changes. Revenue Procedure 2014-61 provides details about these annual adjustments.  The tax items for tax year 2015 of greatest interest to most taxpayers include the following dollar amounts –

  • The tax rate of 39.6 percent affects singles whose income exceeds $413,200 ($464,850 for married taxpayers filing a joint return), up from $406,750 and $457,600, respectively. The other marginal rates – 10, 15, 25, 28, 33 and 35 percent – and the related income tax thresholds are described in the revenue procedure.
  • The standard deduction rises to $6,300 for singles and married persons filing separate returns and $12,600 for married couples filing jointly, up from $6,200 and $12,400, respectively, for tax year 2014. The standard deduction for heads of household rises to $9,250, up from $9,100.
  • The limitation for itemized deductions to be claimed on tax year 2015 returns of individuals begins with incomes of $258,250 or more ($309,900 for married couples filing jointly).
  • The personal exemption for tax year 2015 rises to $4,000, up from the 2014 exemption of $3,950. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $258,250 ($309,900 for married couples filing jointly). It phases out completely at $380,750 ($432,400 for married couples filing jointly.)
  • The Alternative Minimum Tax exemption amount for tax year 2015 is $53,600 ($83,400, for married couples filing jointly). The 2014 exemption amount was $52,800 ($82,100 for married couples filing jointly).
  • The 2015 maximum Earned Income Credit amount is $6,242 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,143 for tax year 2014. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds and phaseouts.
  • Estates of decedents who die during 2015 have a basic exclusion amount of $5,430,000, up from a total of $5,340,000 for estates of decedents who died in 2014.
  • For 2015, the exclusion from tax on a gift to a spouse who is not a U.S. citizen is $147,000, up from $145,000 for 2014.
  • For 2015, the foreign earned income exclusion breaks the six-figure mark, rising to $100,800, up from $99,200 for 2014.
  • The annual exclusion for gifts remains at $14,000 for 2015.
  • The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) rises to $2,550, up $50 dollars from the amount for 2014.
  • Under the small business health care tax credit,  the maximum credit is phased out based on the employer’s number of full-time equivalent employees in excess of 10 and the employer’s average annual wages in excess of $25,800 for tax year 2015, up from $25,400 for 2014.

Details on these inflation adjustments and others not listed in this release can be found in Revenue Procedure 2014-61, which will be published in Internal Revenue Bulletin 2014-47 on Nov. 17, 2013. The pension limitations for 2015 were announced on Oct. 23, 2014.

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Information Reporting Program Advisory Committee Issues Annual Report

WASHINGTON ― The Information Reporting Program Advisory Committee (IRPAC) today issued its annual report for 2014, including numerous recommendations to the Internal Revenue Service on new and continuing tax administration issues.

“The IRS values the insight and perspective IRPAC provides,” IRS Commissioner John Koskinen said. “The committee members have experience working with an incredibly diverse range of individual taxpayers and organizations both large and small. Their feedback helps us improve tax administration for the nation, and we will study their recommendations closely.”

The report includes a discussion of the IRS Taxpayer Identification Number Matching Program and a recommendation that IRS expand the program, permitting financial and other firms to use it to verify taxpayer names and identification numbers on a greater variety of information returns.

During 2014, the committee continued its dialogue with IRS officials regarding reporting requirements under the Foreign Account Tax Compliance Act (FATCA) and the Affordable Care Act (ACA).

The report also includes recommendations involving procedures for business taxpayer address changes, third-party sick pay reporting, Form 1099-K, Payment Card and Third Party Network Transactions, and Form1099-B, Proceeds From Broker and Barter Exchange Transactions, among other recommendations.

The full 2014 IRPAC Public Report is available at IRS.gov.

IRPAC is a federal advisory committee that provides an organized public forum for discussion of information reporting issues. It is comprised of a diverse cross-section of individuals drawn from the tax professional community, financial institutions, small and large businesses, universities and colleges, as well as securities and payroll firms.

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IRS Announces Tax Guidance Related to Ebola Outbreak in Guinea, Liberia and Sierra Leone

WASHINGTON — The Internal Revenue Service today issued two items of guidance in response to the need for charitable and other relief due to the Ebola outbreak in Guinea, Liberia and Sierra Leone. One provides special relief intended to support leave-based donation programs to aid victims who have suffered from the Ebola outbreak in those countries. The other designates the Ebola outbreak in those countries as a qualified disaster for federal tax purposes.

Under the leave-based donation guidance, employees may donate their vacation, sick or personal leave in exchange for employer cash payments made to qualified tax-exempt organizations providing relief for the victims of the Ebola outbreak in Guinea, Liberia or Sierra Leone. Employees can forgo leave in exchange for employer cash payments made before Jan. 1, 2016. Under this special relief, the donated leave will not be included in the income or wages of the employees. Employers will be permitted to deduct the amount of the cash payment. 

For example, if an American company has such a program and makes a cash donation of the value of an employee’s donated leave before January 1, 2016, to an organization that is providing medical services and supplies for the relief of victims of the Ebola outbreak in Guinea, Liberia, or Sierra Leone, the IRS will not consider the amount of that payment as gross income or wages of the employee.  Additionally, the IRS will not assert that the U.S. company can only deduct such cash payments under Internal Revenue Code section 170.

The IRS reminds taxpayers there are some simple steps they can take to ensure that their contributions go to qualified charities, and more information is available at IRS.gov.

The qualified-disaster guidance allows recipients of qualified relief payments related to the Ebola outbreak in Guinea, Liberia and Sierra Leone to exclude those payments from income on their tax returns. Under today’s guidance payments generally include amounts to cover necessary personal, family, living or other qualified expenses that were not covered by insurance. 

For example, if an employee living in Guinea receives reimbursement from an employer-sponsored charitable organization for medical expenses incurred by the employee as a result of the Ebola outbreak in Guinea, such reimbursement will not be included in the employee’s gross income for U.S. federal income tax purposes.

Similarly, if an employee of an American company is relocated within Liberia under a quarantine order due to the Ebola outbreak in Liberia, and the American company pays for the employee’s transportation, rent and living expenses related to the quarantine order, such payments will not be included in the employee’s gross income for U.S. federal income tax purposes.

Today’s announcement of qualified relief follows similar steps taken in other qualified disasters, such as the Japan earthquake and tsunami and the Haiti earthquake. The announcement about leave-based donation programs is similar to programs available in the aftermath of Hurricane Sandy and Hurricane Katrina.

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IRS Provides Information about the Affordable Care Act in Spanish

WASHINGTON — The Internal Revenue Service is announcing several options for Spanish speakers to get information about the tax provisions of the Affordable Care Act. Two recently issued YouTube videos feature IRS Commissioner John Koskinen: Disposición de La Responsabilidad Compartida (Individual Shared Responsibility Provision) and Crédito Tributario de Prima – Cambios en las Circunstancias  (Premium Tax Credit – Changes in Circumstances).

The IRS.gov has information about the Affordable Care Act tax provisions in both English and Spanish to inform and educate the public on how the health care law may affect them. The main Spanish pages include:

These pages provide information about tax provisions that are now in effect and those that will go into effect in 2015 and beyond. The IRS has also developed a number of publications in Spanish currently available online.

By making its products available in Spanish, the IRS is providing relevant information about the law and its provisions, legal guidance, the latest news, frequently asked questions and links to additional resources to a significant portion of taxpayers with limited English proficiency. As many as 1 in 4 uninsured individuals who are eligible for coverage through the Health Insurance Marketplace nationwide are Hispanic.

In addition to the Commissioner’s messages, the agency has several other videos and audio files in Spanish on the health care law and a variety of other relevant and useful tax topics.

Spanish speaking taxpayers may also wish to follow and retweet @IRSenEspanol on Twitter.

Taxpayers can also subscribe to receive brief tips in Spanish on a variety of tax issues by email, or visit the IRS Spanish Newsroom for the most up-to-date information from the agency.

For information in Spanish about the health care provisions of the Affordable Care Act, visit CuidadoDeSalud.gov. For more information about a variety of IRS resources in Spanish on the Affordable Care Act and more visit the IRS website, IRS.gov.

Additional Resources

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2015 PTIN Renewal Period Underway for Tax Professionals

WASHINGTON —The Internal Revenue Service today reminded the nation’s more than 690,000 federal tax return preparers that they must renew their Preparer Tax Identification Numbers (PTINs) for 2015. All current PTINs will expire Dec. 31, 2014.

Anyone who prepares or helps prepare any federal tax return or claim for refund , for compensation must have a valid PTIN from the IRS. The PTIN must be used as the identifying number on returns prepared.

“We ask that you renew your PTIN as soon as possible to avoid a last-minute rush, ,” said Carol A. Campbell, director, IRS Return Preparer Office. “It’s easy to let this slip as the holiday season approaches.”

For those who already have a 2014 PTIN, the renewal process can be completed online and only takes a few moments. The renewal fee is $63. If you cannot remember your user ID and password, there are online tools to assist you. Preparers can get started at www.irs.gov/ptin.

If you are registering for the first time, the PTIN application fee is $64.25 and the process may also be completed online.

Form W-12, IRS Paid Preparer Tax Identification Number Application and Renewal, is available for paper applications and renewals, but takes four to six weeks to process. Failure to have and use a valid PTIN may result in penalties. All enrolled agents, regardless of whether they prepare returns, must have a PTIN in order to maintain their status.

Issuance of ‘Annual Filing Season Program – Records of Completion’ to begin

PTIN holders who renew their PTIN for 2015 and have met the continuing education requirements for the new voluntary IRS Annual Filing Season Program will be contacted by the IRS with instructions on how to elect to participate and print their Annual Filing Season Program – Record of Completion.

The Annual Filing Season Program allows uncredentialed tax return preparers to obtain a record of completion when they voluntarily complete a required amount of continuing education, including a course in basic tax filing issues and updates, ethics, as well as other federal tax law courses.

Tax return preparers who elect to participate in the program will be included in a database on IRS.gov that will be available by January 2015 to help taxpayers determine return preparer qualifications.

The database will contain information on preparers with the Annual Filing Season Program qualification and it will also contain information about practitioners with recognized credentials and unlimited practice rights. These include attorneys, certified public accountants (CPAs), enrolled agents, enrolled retirement plan agents (ERPAs) and enrolled actuaries who are registered with the IRS.

“The Annual Filing Season Program is about improving and sustaining preparer education and ensuring that those who prepare Form 1040 tax returns have a basic understanding of filing season requirements,” Campbell said. “It is not about replacing the important tax work done by certified public accountants, enrolled agents and attorneys. Tax professionals with recognized credentials will be publicly listed on IRS.gov, and we plan to help inform taxpayers about all the options available.”

For more information about requirements for federal tax professionals and access to the online PTIN system, go to www.irs.gov/for-Tax-Pros and www.irs.gov/Tax-Professionals/Annual-Filing-Season-Program.

For information on how to become an enrolled agent, go to www.irs.gov/Tax-Professionals/Enrolled-Agents.

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IRS Announces 2015 Pension Plan Limitations; Taxpayers May Contribute up to $18,000 to their 401(k) plans in 2015

WASHINGTON — The Internal Revenue Service today announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2015.  Many of the pension plan limitations will change for 2015 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment.  However, other limitations will remain unchanged because the increase in the index did not meet the statutory thresholds that trigger their adjustment.  Highlights include the following:

  • The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $17,500 to $18,000.
  • The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $5,500 to $6,000.
  • The limit on annual contributions to an Individual Retirement Arrangement (IRA) remains unchanged at $5,500.  The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
  • The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $61,000 and $71,000, up from $60,000 and $70,000 in 2014.  For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $98,000 to $118,000, up from $96,000 to $116,000.  For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $183,000 and $193,000, up from $181,000 and $191,000.  For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
  • The AGI phase-out range for taxpayers making contributions to a Roth IRA is $183,000 to $193,000 for married couples filing jointly, up from $181,000 to $191,000 in 2014.  For singles and heads of household, the income phase-out range is $116,000 to $131,000, up from $114,000 to $129,000.  For a married individual filing a separate return, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
  • The AGI limit for the saver’s credit (also known as the retirement savings contribution credit) for low- and moderate-income workers is $61,000 for married couples filing jointly, up from $60,000 in 2014; $45,750 for heads of household, up from $45,000; and $30,500 for married individuals filing separately and for singles, up from $30,000.

Below are details on both the adjusted and unchanged limitations.

Section 415 of the Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans.  Section 415(d) requires that the Secretary of the Treasury annually adjust these limits for cost of living increases.  Other limitations applicable to deferred compensation plans are also affected by these adjustments under Section 415.  Under Section 415(d), the adjustments are to be made under adjustment procedures similar to those used to adjust benefit amounts under Section 215(i)(2)(A) of the Social Security Act.

Effective January 1, 2015, the limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) remains unchanged at $210,000.  For a participant who separated from service before January 1, 2015, the limitation for defined benefit plans under Section 415(b)(1)(B) is computed by multiplying the participant’s compensation limitation, as adjusted through 2014, by 1.0178.

The limitation for defined contribution plans under Section 415(c)(1)(A) is increased in 2015 from $52,000 to $53,000.

The Code provides that various other dollar amounts are to be adjusted at the same time and in the same manner as the dollar limitation of Section 415(b)(1)(A).  After taking into account the applicable rounding rules, the amounts for 2015 are as follows:

The limitation under Section 402(g)(1) on the exclusion for elective deferrals described in Section 402(g)(3) is increased from $17,500 to $18,000.

The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $260,000 to $265,000.

The dollar limitation under Section 416(i)(1)(A)(i) concerning the definition of key employee in a top-heavy plan remains unchanged at $170,000.

The dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a 5 year distribution period is increased from $1,050,000 to $1,070,000, while the dollar amount used to determine the lengthening of the 5 year distribution period remains unchanged at $210,000.

The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) is increased from $115,000 to $120,000.

The dollar limitation under Section 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50 or over is increased from $5,500 to $6,000.  The dollar limitation under Section 414(v)(2)(B)(ii) for catch-up contributions to an applicable employer plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50 or over is increased from $2,500 to $3,000.

The annual compensation limitation under Section 401(a)(17) for eligible participants in certain governmental plans that, under the plan as in effect on July 1, 1993, allowed cost of living adjustments to the compensation limitation under the plan under Section 401(a)(17) to be taken into account, is increased from $385,000 to $395,000.

The compensation amount under Section 408(k)(2)(C) regarding simplified employee pensions (SEPs) is increased from $550 to $600.

The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts is increased from $12,000 to $12,500.

The limitation on deferrals under Section 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations is increased from $17,500 to $18,000.

The compensation amount under Section 1.61 21(f)(5)(i) of the Income Tax Regulations concerning the definition of “control employee” for fringe benefit valuation remains unchanged at $105,000.  The compensation amount under Section 1.61 21(f)(5)(iii) is increased from $210,000 to $215,000.

The Code also provides that several retirement-related amounts are to be adjusted using the cost-of-living adjustment under Section 1(f)(3).  After taking the applicable rounding rules into account, the amounts for 2015 are as follows:

The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the retirement savings contribution credit for married taxpayers filing a joint return is increased from $36,000 to $36,500; the limitation under Section 25B(b)(1)(B) is increased from $39,000 to $39,500; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $60,000 to $61,000.

The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the retirement savings contribution credit for taxpayers filing as head of household is increased from $27,000 to $27,375; the limitation under Section 25B(b)(1)(B) is increased from $29,250 to $29,625; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $45,000 to $45,750.

The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the retirement savings contribution credit for all other taxpayers is increased from $18,000 to $18,250; the limitation under Section 25B(b)(1)(B) is increased from $19,500 to $19,750; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $30,000 to $30,500.

The deductible amount under Section 219(b)(5)(A) for an individual making qualified retirement contributions remains unchanged at $5,500.

The applicable dollar amount under Section 219(g)(3)(B)(i) for determining the deductible amount of an IRA contribution for taxpayers who are active participants filing a joint return or as a qualifying widow(er) is increased from $96,000 to $98,000.  The applicable dollar amount under Section 219(g)(3)(B)(ii) for all other taxpayers (other than married taxpayers filing separate returns) is increased from $60,000 to $61,000.  The applicable dollar amount under Section 219(g)(3)(B)(iii) for a married individual filing a separate return is not subject to an annual cost-of-living adjustment and remains $0.  The applicable dollar amount under Section 219(g)(7)(A) for a taxpayer who is not an active participant but whose spouse is an active participant is increased from $181,000 to $183,000.

The adjusted gross income limitation under Section 408A(c)(3)(B)(ii)(I) for determining the maximum Roth IRA contribution for married taxpayers filing a joint return or for taxpayers filing as a qualifying widow(er) is increased from $181,000 to $183,000.  The adjusted gross income limitation under Section 408A(c)(3)(B)(ii)(II) for all other taxpayers (other than married taxpayers filing separate returns) is increased from $114,000 to $116,000.  The applicable dollar amount under Section 408A(c)(3)(B)(ii)(III) for a married individual filing a separate return is not subject to an annual cost-of-living adjustment and remains $0.

The dollar amount under Section 430(c)(7)(D)(i)(II) used to determine excess employee compensation with respect to a single-employer defined benefit pension plan for which the special election under Section 430(c)(2)(D) has been made is increased from $1,084,000 to $1,101,000.

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Business E-File Jumps 10 Percent This Year; Doubles in 4 Years; 7 in 10 Corporate and Partnership Tax Returns Now Filed Electronically

WASHINGTON — Business e-file rose nearly 10 percent this year, continuing the growth that has seen the number of corporate and partnership returns filed electronically double in just four years, the Internal Revenue Service said today. An additional 600,000 corporations and partnerships e-filed their tax returns this year.

As of Sept. 21, more than 7 million corporations and partnerships e-filed, an increase of almost 10 percent over the prior year’s total, and twice the nearly 3.5 million returns e-filed during the 2010 fiscal year. About 70 percent of all corporate and partnership returns have been e-filed during 2014. Many corporations and partnerships operating on a calendar year receive filing extensions. The extended due date is usually Sept. 15.

Most large corporations and partnerships are required to e-file.

Large and mid-size corporations, generally those with $10 million or more in total assets, are required to electronically file their Forms 1120 or 1120S. Partnerships with more than 100 partners (Schedules K-1) are also required to e-file their tax returns. The IRS is seeing growth in e-filing by these businesses and by businesses not required to e-file.

This year, 92,494 large corporations e-filed their returns, an increase of 8.6 percent compared to the same time last year. The greatest rate of growth in e-filing among these businesses is by large partnerships. This year, 122,879 large partnerships e-filed, up more than 14 percent from the same time the year before.

Tax Returns e-filed by Corporations and Partnerships

Category of e-filers 

Sept. 22, 2013

Sept. 21,2014

%Change

Large Corporation Tax Returns

85,180

92,494

8.59%

Other Corporate Returns

4,007,895

4,373,597

9.12%

Total Corporate Returns

4,093,075

4,466,091

9.11%

Large Partnership Tax Returns

107,730

122,879

14.06%

Other Partnership Returns

2,388,175

2,640,319

10.56%

Total Partnerships

2,495,905

2,763,198

10.71%

Total Returns

6,588,980

7,229,289

9.72%

 

Corporations and partnerships can get more information about IRS e-file at IRS.gov.

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