Tax Adjustments for 2014 Gross Income
FEBRUARY 26, 2014
What Adjustments to 2014 Gross Income Are Available?
Once total or gross income from all sources has been determined, certain adjustments to income are available. These adjustments amount to a reduction in gross income and generally are granted to achieve tax fairness or in recognition of a desirable social objective. Adjustments to income are available regardless of whether a taxpayer itemizes deductions or takes the standard deduction.
The available adjustments to income include:
|Eligible individuals can contribute and deduct up to $5,500 to an IRA; $10,000 for an eligible married couple, even if one spouse has no earned income. For workers age 50 and older, the IRA contribution limit is $6,500 for 2014.|
|Education Savings Account Contributions
|Subject to income limitations, up to $2,000 per beneficiary (generally a child under age 18) per year may be contributed to an Education Savings Account and deducted; subject to income limitations.|
|Student Loan Interest Deduction
|Up to $2,500 of the interest paid in 2014 on a loan for qualified higher education expenses may be deducted, subject to income limitations.|
|Health Savings Account Deduction
|Contributions to a Health Savings Account, up to specified maximums, may be deducted.|
|One-Half of Self-Employment Tax
|Self-employed taxpayers generally deduct one-half of their self-employment tax, as determined on Schedule SE.|
|Self-Employed Health Insurance Deduction
|Self-employed taxpayers can deduct 100 percent of the health insurance premiums (including long-term care insurance premiums) they pay for themselves, their spouses and dependents.|