When filing your 2013 income tax return, you may want to educate yourself on the tax code changes made during 2013. Below are some of these changes that may affect your tax situation:
High Income Households — will be subject to a higher tax bracket. Prior to the new law a single citizen making over $400,000 and married couples earning more than $450,000 where at a 35% tax rate. In 2013 an increase of 4.6% will now place them at a tax rate of 39.6%. Another change for this group is the tax rate on capital gains and dividends increased to 20%.
Estate Taxes — Estates valued over $5 million will now incur a 40% tax rate, a 5% increase from last year.
Medicare Taxes — If your income exceeds $200,000 (single) or $250,000 (married filing joint) the Affordable Care Act will add two new taxes: 3.8% net investment income tax and 0.9% additional Medicare tax.
HSA Accounts – The contribution limits on a high-deductible health insurance plan (HAS) for 2013 are $3,250 (individual plan) and $6,450 (family coverage plan). These contribution limits will each increase by $50 for 2014.
Payroll Taxes – The 2% Social Security tax reduction of 2011 and 2012 no longer applies. The 2013 rate is 6.2% instead of 4.2%.
Please check with your certified tax professional and have them provide you with a list of changes to the tax code. Many of these changes appear to affect only high-income households, but all tax laws new and old should be considered when planning for next year’s income taxes.
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