2013 Income Tax Changes

Posted by on Apr 27, 2013 in Income Tax Changes | 0 comments

2013 Income Tax Changes

As a service to our tax clients, we at America’s Tax & Accounting Service are constantly researching any changes to tax laws that may affect our clients.

 

2013 Income Tax Changes America's Tax & Accounting Service

Contact America’s Tax & Accounting Service for your 2013 tax planning

 

While there were very few major changes for 2012 tax returns, there are several changes that are scheduled to take effect this year, which may affect your 2013 tax return.  We’ve listed the most significant changes that may affect 2013 tax return below:

  • The standard mileage rate for 2013 is now $0.565 p/mile for business miles, which is a slight increase over the 2012 mileage rate
  • For high income earners earning over $400,000 for a single person ($450,000 for married couples), the maximum tax rate will now be 39.6% instead of the previous 35%.
  • The capital gains tax rate for high income earners (thresholds noted above) will also be increased to 20% (compared to 15% last year).
  • For high income earners in the above two categories, there is also an additional 0.9% hospital insurance tax, which will be deducted through their normal payroll tax deductions.  Also, for families making $250,000 or more annually, there will be a 3.8% surtax on investment income
  • For those clients that itemize, the floor for itemizing medical expenses has been increased from 7.5% of Adjusted Gross Income (AGI) to 10% in 2013, meaning the taxpayer must spend an additional 2.5% more of their income before they can get a deduction for medical expenses.
  • The maximum amount you can contribute to a 401(k) plan have been raised to $17,500.  The catch-up contribution limit for taxpayers over 50 has been increased to $5,500.
  • The maximum amount you can contribute to an Individual Retirement Account (IRA) has been increased to $5,500.  The catch-up contribution is unchanged from last year and remains at $1,000.

The below tax deductions will still be in place for the 2013 income tax season:

  • Filers going through a foreclosure or short sale will still be able to exclude most (if not all) of the debt from taxable income through the principal residence exclusion.
  • Child tax credits, Earned Income Credits, and the American Opportunity Credit have all been extended through 2017.
  • Mortgage insurance premiums can continue to be deducted as mortgage interest.

 

2013 Income Tax Changes America's Tax & Accounting Service

America’s Tax & Accounting Service is already studying 2013 tax changes so that you don’t have to!

 

We hope that you’ve found the above information helpful.  Please feel free to contact America’s Tax & Accounting Service for any help in tax planning or any accounting needs.  We can be reached year round at (813) 983-0235.

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