Taxpayers who feel confident in their abilities to navigate the new tax law may find everything they need online. News articles often highlight changes, but these articles aren’t always accurate or a complete source of information that can be used to file tax returns. One of the best sites for current information is IRS.gov.
Individuals who have a 1040 form to file will benefit by downloading and reading Publication 17.
Some of the changes and extensions of prior laws that may affect a taxpayer include:
- Deduction for student loan interest expense is allowed for 2012 returns. But, the amount allowed is subject to phasing out based on income.
- The tuition and fees deduction for amounts paid for you, spouse or dependents up to $4,000 is available for 2012.
- Taxpayers at higher income levels should increase withholding for 2013. There is a new tax bracket in effect at 39.6% for single filers who will report more than $400,000 in taxable income and for those that are filing as married who report more than $450,000.
- An itemized deduction phase-out begins again in 2013. This means that itemized deductions may be limited for 2013 filers who are single and earn more than $250,000 or married and have more than $300,000 in taxable income. Again, higher income taxpayers should consider increasing withholding in anticipation of having a higher tax bill when they file the 2013 return.
For those that file their own returns, it is a great idea to do a little research on tax filing software; some are easier to use than others. Many of the software systems provide a question and answer format. Individuals who are not accountants should fill out the return using the question and answer routine. It can be very helpful in finding deductions and sources of income that most people wouldn’t have thought about and can help provide a more accurate return. After you’re finished entering the data, always run the program’s error check routine. It can find missing information that should have been entered, entry errors, and alert you to some issues that might trigger an audit.
On a final note, it is always a good idea to get advice if a complicated issue comes up with your tax situation. But, be sure you get good advice. Consider contacting a CPA, an enrolled agent, or a tax lawyer for advice. Those individuals have the education and experience to help you and they have passed a professional exam to qualify as an adviser.
Lee (2013). Tax law changes you need to know for 2013. Retrieved from: http://www.foxbusiness.com/personal-finance/2013/01/10/tax-law-changes-need-to-know-for-2013/#ixzz2PV1H9fpD
Recent tax law changes of 2013, (2013). Retrieved from: http://www.natlawreview.com/article/recent-tax-law-changes-2013
About the Author:
Dr. Whitley has an MBA from the University of Houston and a Doctorate in Education from the University of Alabama. Dr. Whitley has been teaching accounting and finance for over 25 years. Dr. Whitley is a CPA and he maintains a tax practice in Alabama.