There have been some last minute changes for the 2013 and 2014 tax years. Many of these changes were made in December 2013.
Here is a summary of some of the latest tax law changes for this new year:
- Income tax rate increase for high earners beginning 2013
- Rates remain at 10%, 15%, 25%, 28%, 33% and 35%
- 39.6% rate applies to income above: $450,000 married filing joint, qualifying widow; $425,000 head of household; $400,000 single; $225,000 married filing separate (indexed for inflation after tax year 2013)
- Individual provisions extended for tax years 2012 and 2013
- Deduction for school teacher expenses
- Tuition and fees deduction
- State and local general sales tax deduction
- Mortgage insurance premiums treated as residence interest
- Exclusion for discharge of principal residence debt (tax year 2013 only)
- Tax-free distributions from IRAs for charitable purposes
- Higher threshold for deducting medical expenses
- Floor raised from 7.5% of AGI to 10%
- AGI floor for individuals age 65 and older will remain unchanged at 7.5% through 2016
- 2013 Standard Mileage Rates
- Business: 56.5 cents/mile
- Medical and moving: 24 cents/mile
- Charitable: 14 cents/mile
- DOMA: Many tax breaks are now available to legally married same-sex couples: right to file a joint return; ability to get tax-free employer health coverage; ability for either spouse to utilize the marital deduction & exclusion for estate and gift tax purposes; and many other provisions, such as alimony deduction and innocent spouse relief. (The term “marriage” doesn’t include registered domestic partners and civil unions, even for opposite sex couples.)
Remember to make an appointment soon! As a reminder, the tax season has been delayed by the Internal Revenue Service, and e-filing will begin on January 31st for individuals.
Have a wonderful evening!
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