For those that itemize their deductions on the individual income
tax returns it is important to pay special attention to some of the changes
that came into play in 2013.
1.
High-income earners will need to keep in mind the phase-out provision of the American Taxpayer Relief Act of 2012. The phase-out kick in once your AGI's (adjusted gross income) reaches $250,000 for single filers
and $300,000 for married filing jointly.
The phase-out of itemized deductions will also raise tax bills for
high-income earners by reducing the tax benefit of the certain itemized
deductions. These deductions include: mortgage interest; property, income and
sales taxes; contributions; and miscellaneous deductions
2.
Medical deduction – beginning January 1st
2013 unreimbursed medical expenses threshold has been increase to 10% of AGI (adjusted gross income). For tax payers over 65 years of age or with a
spouse who is over 65 the threshold remains at 7.5% until December 31, 2016.
3.
To claim a charitable deduction for cash
donation above $250 you are required to have written acknowledgement and/or
cancelled check. In short keep good records!
4.
For 2013 those tax payers that are over 70½ and
do not itemize you can still take advantage of charitable donations by making RMD
(required minimum distribution) directly
to a charitable organization. This will
not be considered a charitable deduction on your tax return but the
distribution will be tax-free.
Again year-end tax planning is an essential tool if one is
to reduce their tax bill.
No comments:
Post a Comment