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Federal Tax Law Changes 2013. Federal Tax Law Changes 2013. New provisions Indexing Extenders Form change Due Dates. Same Sex Married Couples. Due to the Supreme Court striking down DOMA, same sex marriages are now recognized for tax purposes
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Federal Tax Law Changes 2013 • New provisions • Indexing • Extenders • Form change • Due Dates ORTC Training – 2013
Same Sex Married Couples • Due to the Supreme Court striking down DOMA, same sex marriages are now recognized for tax purposes • If legally married in any state or foreign country, same sex couples file MFJ or MFS • Does not apply to civil unions or RDPs • We do NOT ask for proof of marriage ORTC Training – 2013
Medical Deduction Haircut • Taxpayers can deduct amount of unreimbursed medical and dental expenses that exceeds 10%of AGI (was 7.5%) • If 65 or older, threshold remains 7.5% ORTC Training – 2013
Capital Gains Tax Rate • New 20% rate for higher income taxpayers • Unlikely to affect our taxpayers ORTC Training – 2013
New Taxes • Medicare tax on high incomes • Net investment income tax for high income taxpayers • Both apply if AGI exceeds • $200,000 Single or HH • $250,000 MFJ or QW • $125,000 MFS • Both out of scope ORTC Training – 2013
Social Security Tax Rate • Employee portion of social security tax returns to 6.2% (was 4.2% for 2011–2012) • Applies to self-employment tax too • Full social security rate now 12.4% • Total S-E tax rate 15.3% ORTC Training – 2013
Standard Deduction and Exemption Increases • $6,100 – Single or MFS • $7,600 – Single >65 or blind • $8,950 – HH • $10,150 – HH >65 or blind • $12,200 – MFJ or QW • $13,400 – MFJ, QW >65 or blind • Exemptions increase to $3,900 ORTC Training – 2013
Standard Mileage Rates 2013 • 56.5¢ per mile – business miles • 24¢ per mile – medical miles • 14¢ per mile – charitable miles ORTC Training – 2013
EIC Maximum Creditsand Income • $6,044 – three or more qualifying children • $5,372 – two qualifying children • $3,250 – one qualifying child • $487 – no qualifying child • $46,227 ($51,567 MFJ) 3 qualifying children • $43,038 ($48,378 MFJ) 2 qualifying children • $37,870 ($43,210 MFJ) 1 qualifying child • $14,340 ($19,680 MFJ) no qualifying child Max Credit Max Income ORTC Training – 2013
Deductible Long-Term Care Premium Limits • Qualified long-term care premiums includible as medical expense on Sch A • $360 – Age 40 or under • $680 – Age 41 to 50 • $1,360 – Age 51 to 60 • $3,640 – Age 61 to 70 • $4,550 – Age 71 and over ORTC Training – 2013
Other Indexing • HSA Limits • $3,250 self-only coverage • $6,500 family coverage • Both + $1,000 if age 55 or older • Retirement savings credit income limits • Max $29,500, $59,000 MFJ, $44,250 HH • Max investment income for EIC $3,300 ORTC Training – 2013
Other Indexing • IRA contributions • Max $5,500 ($6,500 if age 50 or older) • Modified AGI limits when covered by employer plan • Lifetime learning credit income limits • Excludible savings bond interest – out of scope • Foreign earned income exclusion ORTC Training – 2013
Extended Provisions 2013 • Tax-free distribution from IRAs to public charities for individuals age 70½ or older • COD exclusion for principal residence • Adjustment for educator classroom expenses up to $250 • Adjustment for qualified tuition and fees ORTC Training – 2013
Extended Provisions • Premiums for mortgage insurance deductible as interest for qualified residence • Deduction for state and local general sales taxes • Nonbusiness energy property credit ORTC Training – 2013
Form Changes • Sch D new lines if all transactions on statement are Code A or D – basis reported to IRS with no adjustments • We continue to enter all capital gains/losses on Capital Gains Worksheet in TaxWise • TaxWise will carry to proper forms/lines ORTC Training – 2013
Due Dates • 2013 tax returns are due Tuesday, April 15, 2014 • 2014 estimated payments due • April 15, 2014 • June 15, 2014 • September 15, 2014 • January 15, 2015 ORTC Training – 2013
Tax Law Changes 2013 Comments? Questions? ORTC Training – 2013