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40 April 2014 | beautystorebusiness.com It should also be noted that the much- anticipated employer penalty for failure to provide health coverage was delayed by President Obama for the 2014 tax year. However, starting in 2015, if you have more than 50 full-time employees (working 30-plus hours per week), you will be hit with a tax penalty if you do not cover all of your full-time employees. The penalty will be calculated by multiplying $2,000 times the total number of full-time employees minus 30. So, in 2015 if you have 80 full- time employees and you don't offer quali- fied coverage to all of them, your penalty will be $100,000 ($2,000 x 50). RETIREMENT PLANS While the contribution limit for 401(k) plans will be unchanged at $17,500, there are modifications that impact defined con- tribution plans and Individual Retirement Plans. According to The Kiplinger Tax Letter, the new paying cap for defined contribu- tion plans is $52,000—an increase of $1,000 over 2013. The pension plan benefit limit increases $5,000 to $210,000, and a $260,000 salary is the new cap for retire- ment plan contributions. As for IRAs, the deduction phaseouts will increase from $60,000 to $70,000 for singles ($96,000 to $116,000 for marrieds). For Roth IRAs, the income caps will increase from $114,000 to $129,000 for singles ($181,000 to $191,000 for marrieds). SOCIAL SECURITY AND MEDICARE The wage cap for social security taxes increases by $3,300 to $117,000 in 2014, while the social security tax rate remains at 6.2% for both employers and employ- ees. And while the Medicare tax rate remains at 1.45% for both businesses and workers, a new surtax of 0.9% is now introduced as part of the Afford- able Care Act for singles making at least $200,000 and couples with income of more than $250,000. In addition to changes in federal tax laws, there are also a number of tax-related changes at the state level for 2014. For instance, North Carolina recently passed a law reducing state corporate tax rates from 6.9% to 6% in 2014 and then to 5% in 2015 and beyond. Tax rate reductions also were passed for individuals living in North Carolina. Consult your CPA and/ or your state government tax website for changes that may impact your business. ■ J. Tol Broome Jr. is a Winston-Salem, NC-based freelance writer with nearly three decades of commercial- lending experience. Thinkstockphotos.com/iStock collection T a x L a w C h a n g e s 2 0 1 4 . i n d d 4 0 Tax Law Changes 2014.indd 40 3 / 5 / 1 4 1 : 3 9 P M 3/5/14 1:39 PM