The Affordable Care Act, as well as other normal updates to the schedules and percentages of taxes are offered for the upcoming tax season.
Local tax preparer Tonya Perkins from Tonya’s Tax Service has been assisting residents in Lincoln County for 35 years, and shared some details on what to look for this year that could affect your return.
For example, the 7 ½ percent floor on Schedule A Medical Expense deduction increased to 10 percent for most taxpayers, meaning we won’t be able to deduct as much as we did from 2012.
Beginning in 2013, a .9 percent Additional Medicare Tax was applied to wages earned by high income taxpayers. Itemized deductions have also had a limit placed on them for those who make $150,000 and above.
The personal exemption amount is increased to $3,900 for taxpayers this year, but is less if your income is more than $150,000 and up. Also the standard deduction also increased depending on your filing status.
A simplified method is offered for those who can take a home office deduction, which Perkins says can be figured by the square foot.
A new tax bracket of 39.6 percent has been created for 2013, and is the highest tax rate.
There is also an additional Hospital Insurance tax on self-employment income, as well as a Medicare tax on an individual’s net investment income that also extends to estates and trusts. Health flexible spending arrangements (FSAs) will not allow more than $2,500 in salary reduction contributions made beginning after 2012.
Changes to the child tax credit show an increase to the refundable portion. Also increasing are the earned income credit percentages for families with three or more qualifying children. However, proof is still required to claim the child for this credit. In addition, the IRA contribution catch-up provisions have increased.
To learn more about changes that affect your tax filing this year, information can be found at the www.irs.gov website, www.healthcare.gov and www.dol.gov/ebsa/co, or call the toll free IRS help line, 1-800-829-1040.
For more information, consult your tax preparer or visit Tonya Perkins and her new staff member Bobbi Jo Hart in Caliente.