More On Tax Planningfrom The Advisor's Professional Library
- Selected Provisions of the American Taxpayer Relief Act of 2012 The experts of Tax Facts have produced this comprehensive analysis of selected provisions of the American Taxpayer Relief Act of 2012 (the Act) to provide the most up-to-date information to our subscribers. This supplement analyzes important changes to the tax code with emphasis on how these developments impact Tax Facts’ major areas of focus: Employee Benefits, Insurance, and Investments.
- Health Insurance: Health and Medical Savings Accounts A Health Savings Account is a trust created exclusively for the purpose of paying qualified medical expenses of an account beneficiary. Although they are popular, they are not without their pitfalls and the regulations can be complicated. Learn more about how to avoid federal taxation on the accumulation and distributions of HSA.
The Internal Revenue Service has good news for taxpayers: The opening day for the 2014 filing season is Jan. 31, 10 days later than it first planned and one day later than a year ago.
(Deductions for charitable donations and other purposes to be included on 2013 tax returns, however, must be made by Dec. 31.)
In the wake of IT issues with Affordable Health Care Act, the IRS says it wants to have “adequate time to program and test its tax processing systems.” The federal agency, which relies on more than 50 systems to process about 150 million tax returns each year, says that its testing schedule was pushed back this fall due to the 16-day federal government closure.
“Our teams have been working hard throughout the fall to prepare for the upcoming tax season,” IRS Acting Commissioner Danny Werfel said in a press release. “The late January opening gives us enough time to get things right with our programming, testing and systems validation. It’s a complex process, and our bottom-line goal is to provide a smooth filing and refund process for the nation’s taxpayers.”
As in prior years, the IRS is asking taxpayers to use e-file or Free File as the quickest way to receive refunds.
One document that’s full of details on tax-saving opportunities is Publication 17. The 292-page guide explains the American Opportunity Tax Credit for parents and college students, as well as the Child Tax Credit and Earned Income Tax Credit for low- and moderate-income workers.
Some of the tax changes for 2013 to keep in mind include:
- A 0.9% additional Medicare tax, which applies to Medicare wages and self-employment income of $125,000 and up for some individuals and couples;
- A net investment income tax, which is 3.8% of the smaller of your net investment income or the excess of your modified adjusted gross income over $125,000; and
- A bump in the maximum tax rate to 20% from 15% on net capital gain and qualified dividends for some taxpayers.
The IRS says some software firms should begin accepting tax returns in January. They will hold those returns until the IRS systems open on Jan. 31.