|By CAROLE FELDMAN, Associated Press|
All taxpayers will have a harder time taking medical deductions.
In other changes for the 2013 tax year, the alternative minimum tax has been patched — permanently — to prevent more middle-income people from being drawn in, and there's a simpler way to compute the home office deduction.
Tax rate tables and the standard deduction have been adjusted for inflation, as has the maximum contribution to retirement accounts, including 401(k) plans and individual retirement accounts, or IRAs.
The provisions were set by
Nevertheless, the filing season is being delayed because of the two-week partial government shutdown last October. The
"People who are used to filing early in order to get a quick refund are just going to have to wait," said
No change in the
The tax legislation passed at the start of 2013 permanently extended the George W. Bush-era tax cuts for most people but also added a top marginal tax rate of 39.6 percent for those at higher incomes —
On top of that, higher-income taxpayers could see their itemized deductions and personal exemptions phased out and pay higher capital gains taxes — 20 percent for some taxpayers. And there are new taxes for them to help pay for the new health care law.
There are different income thresholds for each of these new taxes.
An additional 0.9 percent
But the phaseout of personal exemptions and deductions doesn't begin until
Taxpayers who didn't plan could find themselves with big tax bills come
"It's a snowball effect," said
"The complexities of the tax code are only affecting those of us trying to read it," National Taxpayer Advocate Nina Olson said in an interview. Tax software makes a lot of those complexities invisible to most people.
As a result, taxpayers might not realize they're being helped by a wide array of deductions and credits. "They have no idea of the benefits they are getting through the tax code," she said.
One simplification: Many investors will find it easier to report stock sales if the 1099-B forms they receive contain key details of the sale and the correct basis for computing gains and losses.
The upward trend of electronic filing continued, with more than 83 percent of returns being filed online. The biggest jump, 4.6 percent, was among people who used software programs to do their own taxes.
For the 2013 tax year, the personal exemption is
Many credits and deductions were extended for 2013, including several for education. Among them: the American Opportunity Credit of up to
Schoolteachers will still be able to deduct up to
Taxpayers will still be able to deduct their medical expenses, but it will be more difficult for many to qualify. The threshold for deducting medical expenses now stands at 10 percent of adjusted gross income, up from 7.5 percent. There's an exception, though, for those older than 65. For them, the old rate is grandfathered in until 2017.
HOME OFFICE DEDUCTION
Among the other changes for 2013, taxpayers who work at home will now have a simplified option for taking a home office deduction.
"You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively," the
But, if you sit at your kitchen table and check work email, it doesn't qualify. "The regular and exclusive business use must be for the convenience of your employer and not just appropriate and helpful in your job," according to the agency.
Most taxpayers claiming the deduction are self-employed, according to the
Until this year, you had to figure actual expenses for a home office, according to Weltman. "Starting with 2013 returns, if you're eligible for the deduction, you can take a standard deduction of
Weltman likened the simplified home office deduction to the
The standard mileage rate for business use of a car in 2013 is
Beginning this year, same-sex couples who are legally married will for the most part have to choose married filing jointly or married filing separately when doing their tax returns. This is true even if they live in a state that does not recognize gay marriage.
Many of these couples will now find themselves hit by the so-called marriage penalty, especially if both spouses work.
For example, with their incomes combined, they might hit the threshold for the extra
However, when it comes to estate taxes, the federal recognition of same-sex marriage will help legally married gay and lesbian couples. That was the issue in the
In addition, health insurance purchased from an employer for a same-sex spouse can be paid pretax and excluded from income.
"Like opposite-sex couples, gay and lesbian married couples can qualify to use the head-of-household status, when kids are involved, where the spouses are living apart," the
Same-sex married couples also have the option of filing amended returns going back to 2010, using the married-filing-jointly status. Rosica said couples will have to look at their individual circumstances to see whether that's beneficial from a tax perspective.
When it comes to filing state returns, same-sex married couples living in states that don't recognize gay marriage most likely will have to file as singles. Since federal returns often are used as a starting point for state returns, that could force them to calculate their federal taxes twice, once for filing the federal return and once for figuring out their state taxes.
If you made energy efficiency improvements to your home, such as installing new windows or a qualifying furnace or heat pump, you might be able to take an energy credit of 10 percent of the cost up to a lifetime maximum of
However, of that total, the
There are additional credits for solar. However, the credit for plug-in electric vehicles has expired.
Once again, the
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