As part of the Affordable Care Act (ACT), the floor for deducting medical expenses has been raised from expenses exceeding 7.5% of Adjusted Gross Income (AGI) to 10% of AGI.


Health insurers or employers will have to provide individuals annually with documentation of their health insurance coverage during the year, which individuals will then file with their tax returns as proof of coverage. IRS officials will then determine whether the type and duration of the individual’s insurance coverage is adequate under the ACA. If coverage is adequate or the taxpayer is exempt from the insurance coverage, no penalty is assessed. The penalty for an individual starts at the greater of $95 or 1% of income in 2014.


The higher-education tuition deduction, which allowed taxpayers to deduct between $2,000 and $4,000 of qualified tuition expense, expired at the end of 2013, as did the health care coverage tax credit.


Another change is the simplified home office deduction. You can now simply deduct $5 for every square foot of home office space used, up to a maximum of 300 square feet, or $1,500.