Tax rules for the 2014 tax year.
Individuals and businesses across North Carolina are approaching the end of the 2014 tax year. Our tax attorneys in Chapel Hillreview below a few income tax legislation amendments for the 2014 tax year. Some affect tax rates and deductions for all taxpayers in our state. Certain deductions, such as allowances for retirees and businesses, are no longer available:
North Carolina Retirement Deductions
- Private retirement income and government income deductions no longer apply. Read the complete list of allowable deductions, including benefits received from state and local governments, at the link.
- Retirees may continue to deduct taxable Social Security benefits.
North Carolina Itemized Deductions
- Our state previously followed federal itemized deduction rules, but taxpayers must follow new rules for 2014. For example, the combined deduction for property taxes and mortgage interest is capped at $20,000. New rules for charitable contributions apply.
North Carolina Business Tax Deductions
- The $50,000 net business income tax deduction is not available.
Standard State Income Tax Deductions for 2014 are as follows:
- Head of Household $12,000
- Married filing jointly / qualifying widow(er) $15,000
- Married filing separately $7,500
- Single $7,500
The income tax rate for all North Carolina taxpayers has dropped to 5.8% for the 2014 tax year, and will drop again to $5.75% for the 2015 tax year.
The changes above are a result of the Tax Simplification and Reduction Act, the same piece of legislation that repealed the state estate tax in 2013. If you have questions about these changes, need to review your tax plan, or curious about beneficial year-end tax moves, contact a North Carolina tax attorney.
Read about federal changes affecting the 2014 tax year.