The document provides an overview and update of strategies to save on 2014 taxes for both businesses and individuals. For businesses, it discusses expired and extended tax provisions, the Affordable Care Act employer shared responsibility requirements, and repair regulations. For individuals, it outlines expired and extended personal tax provisions, the Affordable Care Act individual mandate penalties and premium assistance, and risks of IRS and identity theft scams. It also summarizes Ohio state and local tax law changes impacting individual and business taxes.

1. Strategies to Save On Your
2014 Taxes
December 3, 2014

2. SKODA MINOTTI TEAM
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Michael Minotti, CPA
Partner
Jenna Staton, EA
Manager

3. TODAY’S AGENDA
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• Business Tax Update
 Business Tax Changes
 Repair Regulations For Business Owners
 Affordable Care Act Tax Provisions
• Personal Tax Update
 Personal Tax Changes
 Affordable Care Act Tax Provisions
 IRS Scams/Tax Return Fraud
• State and Local Tax Update

4. Business Tax Update

5. BUSINESS TAX CHANGES
Provisions Expired
• Various temporary tax provisions expired December 31, 2013
 Research Credit
 Work Opportunity Credit
 Differential Wage Credit for Activated Military Reservists
 Enhanced deduction for charitable contributions of food inventory
 Tax incentives for empowerment zones
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6. BUSINESS TAX CHANGES
Provisions Expired
• Continued provisions expired December 31, 2013
 Low-income tax credits for non-federally subsidized new
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buildings
 Low-Income housing tax credit treatment of military housing
allowances
 Adjusted-basis reduction of stock after S corporation charitable
deduction of property
 Recognition period for S corporation built in capital gains
 100% exclusion of small business stock sale or exchange

7. WHICH WILL BE
REENACTED??
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IT’S ANYONE’S GUESS!

8. WHAT CAN I DO TO
MITIGATE BUSINESS TAX?
• Traditional timing of income/deductions to reduce
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overall income
• Take advantage of $25,000 Section 179 expensing
election
• Domestic Production Activities Deduction
• New Tangible Property Regulations (Repair
Regulations)

9. BUSINESS TAX
REPAIR REGULATIONS
Final Regulations on Repair vs. Capitalization Standards
What to Look For What You Will Find
Repairs & Maintenance De Minimus
Capitalization Routine Safe Harbor
Building & Equipment Small Taxpayer Safe Harbor
Materials & Supplies Betterment/Restoration
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10. BUSINESS TAX
AFFORDABLE CARE ACT
Employer shared responsibility
requirements take effect
January 1, 2015
• If I have 100 FTEs, do I provide
affordable, minimum coverage to the
full-time employees and their
dependents?
• Focus on two separate elements:
 What is affordable coverage?
 What is minimum coverage?
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11. WHAT IF I DON’T OFFER
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COVERAGE?
If an employer:
• Fails to offer a full-time employee (or one of their
dependents) coverage; and,
• The employee receives a subsidy (either a tax credit or
cost-sharing reduction) through the exchange for
purchasing health insurance
• The employer may be liable for a $2,000 penalty per year
for the total number of full-time employees (not counting
the first 30 employees)

12. WHAT IF THE COVERAGE
IS UNAFFORDABLE?
• If an employer offers its full-time employees (and
dependents) coverage but the coverage is either:
1. Unaffordable
2. Does not provide minimum coverage
• The employer will be liable for a penalty of $3,000 per
year, times the number of full-time employees who
receive insurance through the exchange and receive a
subsidy
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13. Personal Tax Update

14. PERSONAL TAX CHANGES
Popular Tax Provisions Expired December 31, 2013
• $250 above-the-line annual deduction for professional
educator’s qualified unreimbursed expenses
• Exclusion from gross income for discharges of qualified
principal residence indebtedness
• Itemized deduction for mortgage insurance premiums
• Election to claim deduction for state an local sales tax in
lieu of state and local income taxes
• Exclusion from gross income of charitable distributions of
IRA RMD for individuals aged 70 ½ or older
• Residential energy property credit
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15. WHICH WILL BE
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REENACTED?
IT’S ANYONE’S GUESS!

16. WHAT CAN I DO TO
MITIGATE PERSONAL TAX?
• Accelerate itemized deductions such as real estate
taxes, miscellaneous itemized deductions and state
and local tax payments if you’re not subject to
Alternative Minimum Tax
• Make year-end charitable gifts of cash and non-cash
• Consider any life cycle events such as change in
marital status, changes in medical expenses,
retirement, or a dependent in college
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17. MEDICARE SURTAX
INVESTMENT INCOME TAX
• Patient Protection and Affordable Care Act –
Two Parts
 0.9% increased Medicare tax due on wages and
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self-employment earnings
 3.8% surtax on at least a portion of investment
income such as capital gains, dividends and net
rental income
• Threshold Amounts
 Single taxpayers — $200,000
 Married taxpayers — $250,000

18. PERSONAL TAX CHANGES
AFFORDABLE CARE ACT
• Effective January 1, 2014 the
Affordable Care Act requires
individuals to carry minimum health
coverage
• Fines for non-coverage (shared
responsibility payment) will be
calculated on the 2014 Form 1040
• Taxpayers that obtained health care
through the Marketplace may be
eligible for premium assistance – also
calculated on the taxpayer’s 2014
Form 1040
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19. PERSONAL TAX CHANGES
AFFORDABLE CARE ACT
Shared Responsibility Payment
• 2014 = $95 per person per year or 1% of your Income
• 2015 = $325 per person per year or 2% of your Income
• In addition:
 The penalty is based on modified adjusted gross income
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(modified AGI)
 The total penalty for the taxable year cannot exceed the national
average of the annual premiums of a bronze-level health
insurance plan offered through the health insurance
marketplaces.

20. PERSONAL TAX CHANGES
AFFORDABLE CARE ACT
Shared Responsibility Payment
• The maximum penalty per family is capped at no more
than 300% of the minimum penalty
 2014 = Maximum $95 x 3 = $285
 2015 = Maximum $325 x 3 = $975
• Children under 18 are assessed at 50% of the
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minimum penalty

21. PERSONAL TAX CHANGES
AFFORDABLE CARE ACT
Shared Responsibility Payment
• The penalty is pro-rated for the number of months you
are without health insurance, though there is no penalty
for a single gap in coverage of less than 3 months in
a year
• Health insurance providers will provide proof of coverage
for their customers so as long as you have health
insurance you don’t have to worry about the details
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22. PERSONAL TAX CHANGES
AFFORDABLE CARE ACT
Eligibility for Premium
Assistance
• Buy health insurance through
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the Marketplace;
• Are ineligible for coverage
through an employer or
government plan;
• Are within certain income limits

23. PERSONAL TAX CHANGES
AFFORDABLE CARE ACT
Eligibility for Premium Assistance
• Do not file a Married Filing Separately tax return (unless
you meet the criteria in section 1.36B-2T(b)(2) of the
Temporary Income Tax Regulations, which allows certain
victims of domestic abuse and spousal abandonment to
claim the premium tax credit using the Married Filing
Separately filing status); and
• Cannot be claimed as a dependent by another person
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24. TELEPHONE SCAMS BY
IRS IMPERSONATORS
• Scammers use fake names and
IRS badge numbers
 They generally use common
names and surnames to identify
themselves
• Scammers may be able to
recite the last four digits of a
victim’s Social Security number
• Scammers spoof the IRS toll-free
number on caller ID to
make it appear that it’s the IRS
calling
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25. TELEPHONE SCAMS BY
IRS IMPERSONATORS
• Scammers sometimes send bogus IRS emails to some
victims to support their bogus calls
• Victims hear background noise of other calls being
conducted to mimic a call site
• After threatening victims with jail time or driver’s license
revocation, scammers hang up and others soon call back
pretending to be from the local police or DMV, and the
caller ID supports their claim
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26. TELEPHONE SCAMS BY
IRS IMPERSONATORS
Things to Know – The IRS:
• Never asks for credit card, debit card or
prepaid card information over the
telephone
• Never insists that taxpayers use a
specific payment method to pay tax
obligations
• Never requests immediate payment over
the telephone and will not take
enforcement action immediately following
a phone conversation. Taxpayers usually
receive prior notification of IRS
enforcement action involving IRS tax
liens or levies
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27. TELEPHONE SCAMS BY
IRS IMPERSONATORS
What You Should Do…
• If you know you owe taxes or you think you might owe taxes,
call the IRS at 1-800-829-1040. The IRS employees at that
line can help you with a payment issue, if there really is such
an issue
• If you know you don’t owe taxes or have no reason to think
that you owe any taxes (for example, you’ve never received a
bill or the caller made some bogus threats as described
above), then report the incident to TIGTA at
1-800-366-4484
• You can file a complaint using the FTC Complaint Assistant;
choose “Other” and then “Imposter Scams.” If the complaint
involves someone impersonating the IRS, include the words
“IRS Telephone Scam” in the notes
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28. MINIMIZING IDENTITY
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THEFT RISK
1. When giving out your information (SS #,
DOB) ask how it will be used and if it
will be shared. Will it be publicly
available?
2. Pay immediate attention to your bank
and credit card statements
3. Watch your mail! Incoming and outgoing
4. Place passwords on credit/debit cards
and bank accounts. Avoid mother’s
maiden name, your date of birth, last 4
digits of your SS number, phone
number, and house address
5. Don’t carry unnecessary credit cards on
your person

29. MINIMIZING IDENTITY
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THEFT RISK
6. Never give out personal information over the phone,
thru the mail or on line unless you have initiated the
request to a number you know
7. Destroy personal information when it is discarded –
shredders are very useful
8. Safe keeping of information inside your house
9. Do not carry your social security card
10. Obtain a copy of your credit report from each of the
three reporting bureaus EVERY YEAR!
11. Keep social media disclosures in perspective

30. I AM A VICTIM
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NOW WHAT?
• Place a “Fraud Alert” on your credit reports by calling any
one of the three nationwide credit reporting companies:
 Equifax: 1-800-525-6285
 Experian: 1-888-397-3742
 TransUnion: 1-800-680-7289
• Immediately secure and review all three of your credit
reports carefully, looking for fraudulent or unauthorized
inquiries or activity
• Close any accounts that have been tampered with or
opened fraudulently
• File a police report in the city where you reside
• File required affidavits with tax agencies

31. I AM A VICTIM
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NOW WHAT?
• Is a credit freeze right for you?
• Consider credit monitoring
• Consider closing and then opening new bank accounts
and/or credit card accounts (depending on the ID Theft)
• Discuss increased bank monitoring on your checking
accounts
• File an Identity Theft Victims Complaint and Affidavit with
the Federal Trade Commission
• Document everything
• Never discuss your identity theft case with anyone
wherein you did not initiate the telephone call

32. State & Local Tax Update

33. STATE AND LOCAL UPDATE
• Ohio Individual Income Tax
• Ohio Small Business Deduction
• InvestOhio
• Ohio Commercial Activity Tax
• Ohio Refund Program
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34. OHIO INDIVIDUAL
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INCOME TAX
• 2014 Mid-Biennium Budget Bill
 Additional individual rate reduction. By 2016 the top individual
income tax rate will be less than 5%
 Ohio’s Earned Income Tax Credit was doubled from 5% to 10% of
the federal tax credit
 The Ohio personal exemption was increased from $1,700 to
$2,200 for families earning less than $40,000 per year
 The Ohio personal exemption for families earning between
$40,000 and $80,000 has been increased from $1,700 to $1,950

35. BUSINESS DEDUCTION
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OHIO SMALL
• H.B. 483 also made changes to Ohio’s Small Business
Deduction
 For 2014 this tax deduction was changed to 75% of the first
$250,000 of small business income
 This increase is only for 2014
 For 2014 the deduction will be $187,500 for individuals with a
filing status of married filing jointly or single.
 The deduction for married filing separately the deduction will be
$93,750 ($125,000 x .75%)

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INVESTOHIO
• InvestOhio is still available for
investors in qualified businesses
• The credit is 10% of what is invested
in a qualifying business to secure an
equity investment in the business
The investment must be held for
two years
• The state’s biennium will be ending
6/30/2015 so applications need to be
submitted by this date
• Should be another round of funding
beginning 7/1/2015

37. ACTIVITY TAX
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COMMERCIAL
• The tax has been in place since 7/1/2005 now is the time
to revisit the receipts that are being reported to Ohio for
the Commercial Activity Tax
• Tax Rate = .0026%
• The minimum fee was changed for the Commercial
Activity Tax for tax periods beginning 1/1/2014 the
minimum fee is based on the reported gross receipts for
the prior year

38. ACTIVITY TAX
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COMMERCIAL
The New Minimums
Taxable Gross Receipts Annual Minimum
$1 million or less $150
More than $1mm but less than
or equal to $2mm
$800
More than $2mm but less than
or equal to $4mm
$2,100
More than $4mm $2,600

39. OHIO REFUND PROGRAM
• Am Sub S.B. 263 passed during 2014 authorizes the
State of Ohio to quickly resolve business tax
overpayments
• The Ohio Department of Taxation will now proactively
refund businesses any overpayments that are discovered
• Ohio Department of Taxation has identified almost $34
million in overpaid taxes and have refunded these dollars
plus interest to taxpayers – these refunds have totaled
about $29 million
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40. - 40 -
QUESTIONS?
Michael Minotti, CPA
Partner
mminotti@skodaminotti.com
Jenna Staton, EA
Manager
jstaton@skodaminotti.com