Social Security Tax has increased from 4.2% to 6.2% for 2013 wages up to the taxable wage limit of $113,700. The maximum an employee would pay is $7,049.40 for 2013.
Various 2013 Tax Benefits Inflation Adjustments
The IRS announced the annual inflation adjustments for certain 2013 tax provisions. These include:
-The annual exclusion for gifts rises to $14,000 for 2013, up from $13,000 for 2012.
-The amount used to reduce the net unearned income reported on a child’s tax return subject to the “kiddie tax,” is $1,000, up from $950 for 2012.
-The foreign earned income exclusion rises to $97,600, up from $95,100 in 2012.
The Social Security Administration has announced that the wage base for computing the Social Security tax (OASDI) in 2013 will increase to $113,700 from $110,100. The monthly Social Security and Supplemental Security Income (SSI) benefits will increase 1.7 percent in 2013 due to a cost-of-living adjustment (COLA).
Tax Tip: There are still credits worth up to $500 for energy-efficient home improvements available for 2011 returns.
Tax Tip: If a taxpayer used the proceeds of a mortgage refinancing to improve their principal residence, they may be able to deduct the points paid on the load for the year of purchase.
Charitable donations are deductible but so are EXPENSES incurred while doing charitable work i.e. mileage on your car. These can add up!
Don’t forget to keep your receipts and have accurate record keeping.
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For those of you who currently have Flexible Spending Accounts or are planning to acquire this benefit, as of 2013 the maximum contribution is $2,500. Yes, the maximum allowed amount had decreased due to the Healthcare Reform. Please keep this in mind when planning not only your 2013 health benefits but also when doing your 2013 tax planning.
If you need assistance with your tax planning, please feel free to contact us for a Free Consultation!
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Seven Tax Tips for Disabled Taxpayers
Taxpayers with disabilities may qualify for a number of IRS tax credits and benefits. Parents of children with disabilities may also qualify. Listed below are seven tax credits and other benefits that are available if you or someone else listed on your federal tax return is disabled.
Standard Deduction Taxpayers who are legally blind may be entitled to a higher standard deduction on their tax return.
Gross Income Certain disability-related payments, Veterans Administration disability benefits, and Supplemental Security Income are excluded from gross income.
Impairment-Related Work Expenses Employees, who have a physical or mental disability limiting their employment, may be able to claim business expenses in connection with their workplace. The expenses must be necessary for the taxpayer to work.
Credit for the Elderly or Disabled This credit is generally available to certain taxpayers who are 65 and older as well as to certain disabled taxpayers who are younger than 65 and are retired on permanent and total disability.
Medical Expenses If you itemize your deductions using Form 1040 Schedule A, you may be able to deduct medical expenses. See IRS Publication 502, Medical and Dental Expenses.
Earned Income Tax Credit EITC is available to disabled taxpayers as well as to the parents of a child with a disability. If you retired on disability, taxable benefits you receive under your employer’s disability retirement plan are considered earned income until you reach minimum retirement age.
The EITC is a tax credit that not only reduces a taxpayer’s tax liability but may also result in a refund. Many working individuals with a disability who have no qualifying children, but are older than 25 and younger than 65 do — in fact — qualify for EITC. Additionally, if the taxpayer’s child is disabled, the age limitation for the EITC is waived. The EITC has no effect on certain public benefits. Any refund you receive because of the EITC will not be considered income when determining whether you are eligible for benefit programs such as Supplemental Security Income and Medicaid.
Child or Dependent Care Credit Taxpayers who pay someone to come to their home and care for their dependent or spouse may be entitled to claim this credit. There is no age limit if the taxpayer’s spouse or dependent is unable to care for themselves.
For more information on tax credits and benefits available to disabled taxpayers, see Publication 3966, Living and Working with Disabilities or Publication 907, Tax Highlights for Persons with Disabilitiesavailable on IRS.gov or by calling 800-TAX-FORM (800-829-3676).
For those of you, who have rental properties please ensure that you are claiming your depreciation. Don’t be fooled by those who tell you not to claim depreciation so that when you sell your property you do not have to claim the depreciation. On the contrary, whether or not you have claimed depreciation, you must still account for it. http://ow.ly/i/UHvp
Get answers to tax questions, download federal tax forms or publications or check on a charity at the IRS website – IRS.gov. The site offers free online tax support, 24 hours a day, seven days a week.
Here are five reasons to visit IRS.gov this summer.
The latest news Get up-to-date information on tax law changes. New laws are enacted nearly every year and generally have provisions that affect almost all taxpayers.
Easy-to-use tools The Interactive Tax Assistant (ITA) is a resource that asks a series of questions and provides answers to tax law questions. The ITA tool covers a number of tax topics in an easy-to-use format.
Check out a charity Search for charities and other tax-exempt organizations using Exempt Organizations Select Check and find out if an exempt organization is eligible to receive tax deductible contributions.
Career opportunities Get information about careers at the IRS. Students, recent college graduates and mid-career to experienced professionals are sought by the IRS for full-time career and seasonal positions.
Forms and publications View, download and order tax forms and publications anytime, day or night. http://ow.ly/dmwLQ