|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.