With tax season set to start in January, there are a number of important tax changes that taxpayers and preparers should be aware of to help make the filing process as smooth as possible.

One important change occurs with the Affordable Care Act for individuals and businesses. For people who have not gotten the required health coverage there will be higher penalties. Also, believe it or not, the rules have gotten a little more complicated. Now the penalties can be assessed a certain amount per adult and a certain amount per child based on income levels.

The penalties for not having what the IRS deems minimum essential coverage are continuing to grow more burdensome each year. For 2015, the annual payment amount is either the greater of 2 percent of household income above the tax return filing threshold for the taxpayer’s filing status, or the family’s flat dollar amount, of $325 per adult and $162.50 per child, limited to a family maximum of $975. Compare this to 2014, the annual payment amount for 2014 was the greater of either 1 percent of household income above the tax return threshold for the taxpayer’s filing status, or the family’s flat dollar amount, of $95 per adult and $47.50 per child, limited to a maximum of $285.

For businesses, the IRS, the Treasury Department and Congress have delayed some of their requirements. For instance, in December, the IRS and the Treasury extended by two months the February 1 due date for employers and issuers to provide individuals with forms reporting on offers of health coverage and coverage provided. The February 29 and March 31 deadlines for reporting this information to the IRS (by paper or electronically) were extended by three months.

It will be important for businesses to zero in on how the change in this extension impacts them and the new timing as to when they’re going to have to comply with these kinds of things. These changes do give a little wiggle room for many businesses, but still it’s not something that you want to put off. It’s still out there and it will need to be taken care of. People should be considering now what their implementation plan will be.

This tax extension legislation, passed by Congress in December, will also push back the implementation of the so-called “Cadillac tax” on high-cost health insurance plans from 2018 to 2020, and it suspended the medical device tax for two years.

Beyond those matters, the tax extension legislation made many traditional tax breaks permanent, such as the enhanced Child Tax Credit, the enhanced American Opportunity Tax Credit, the enhanced Earned Income Tax Credit, the above-the-line deduction for teachers who buy school supplies, the charitable deduction of contributions of real property for conservation purposes, along with the Research & Development Tax Credit and Section 179 expensing.

Although most of the deductions that we come to rely on will still be there, people need to make sure how these changes might affect them. And there are no changes in the tax rates, but there are some small changes to the tax brackets. It’s not much, just $1,000 or $2,000 increases before you hit the next tax rate level. It’s good for the tax payer to understand what their tax bracket is. There are so many different brackets and levels these both with regard to the income tax bracket and also when the Net Investment Income Tax hits you, and when the itemized deduction phase-out and Pease provisions come into play. They all have different income amounts associated with them. As a result, it is beneficial to know where you stand. It’s good to know what that extra income is going to get taxed at or if a deduction is going to be beneficial to you. As always, I highly recommend a tax professional help you in the preparation of your tax returns.

About the Author

Drew Cruse is the Chief Financial Officer of Allegheny Anesthetists. Drew is married with three children and four grandchildren. In his off hours, he enjoys reading and spending time with his growing family.