It's Tax Time!

It's tax time! The Internal Revenue Service plans to open the 2014 filing season on January 31, 2014. The delayed opening date is a result of the significant delays the IRS experienced in October following the 16-day federal government closure.

So, what's new for your 2013 return? Keep reading for highlights on some of the changes.

• Additional Medicare Tax.Beginning in 2013, a 0.9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than:
  • $125,000 if married filing separately,
  • $250,000 if married filing jointly, or
  • $200,000 for any other filing status.
• Change in tax rates. The highest tax rate is now 39.6%.
• Tax rate on net capital gain and qualified dividends. The maximum tax rate of 15% on net capital gain and qualified dividends has increased to 20% for some taxpayers.
• Medical and dental expenses. You can deduct only the part of your medical and dental expenses that is more than 10% of your adjusted gross income (7.5% if you are age 65 or older).
• Personal exemption amount increased for certain taxpayers. Your personal exemption is increased to $3,900. But the amount is reduced if your adjusted gross income is over certain limits based on your filing status.
• Limit on itemized deductions. You may not be able to deduct all of your itemized deductions if your adjusted gross income is over certain limits based on your filing status.
• Home office deduction simplified method. If you can take a home office deduction, you may be able to use a simplified method to figure it.
• Standard mileage rates. The 2013 rate for business use of your car is increased to 56½ cents a mile. The 2013 rate for use of your car to get medical care is increased to 24 cents a mile. The 2013 rate for use of your car to move is increased to 24 cents a mile.

Be sure to contact your tax professional for more information. Don't wait till the last minute!