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2013 Tax Tips

  • Let me start by saying our tax laws are not simple and all income is not taxed identically.
    For instance wages and interest income are taxed as regular income up to 30% whereas long term investments and dividends were taxed up to 15% and don’t forget tax free bonds are also available.

  • Get organized and look out for 2012 tax documents including cost basis from your brokerage company.
    Remember IRS gets a copy of all your tax documents. You may miss out on some information but IRS will not.
    Tax deadline is April 15 2013. I recommend filing taxes early, to get fast refunds, if you owe money payments can be scheduled for 2nd week of April.

  • As a reminder Foreign Account Reporting requires you to declare foreign assets worth more than $50,000, whereas FBAR requires you to declare all foreign financial accounts exceeding $10,000 at any time during the calendar year.

  • This year there have been major tax changes and I plan to share some of important ones. Social security tax relief has expired therefore Social Security tax has increased from 4.2% to 6.2%.
    Capital gain tax has increased from 15% to 20% for singles earning above $87,851 and married filing jointly earning above $146,401. For others capital gain tax has increased from 0% to 10%.
    Good news 401K limit has been increased from 17K to 17.5K and IRA limit increased from 5K to 5.5K so here is an opportunity to invest more in your retirement accounts.

  • Contributions to Flexible Spending Accounts (FSA) account is now limited to a max of $2500. Bear in mind FSA accounts are use it or lose it accounts.
    Withdraw penalty for HSA (health saving account) has increased from 10% to 20%. Federal tax rates has increased from 35% to 39.6% for singles earning over 400K and married filing jointly earning more than 450k.

  • Good news is that mortgage debt cancellation up to 2 Million dollars has been extended till 2013. To summarize be prepared to pay higher taxes in 2013.

  • I take quality of my work and client satisfaction seriously. My firm went through a peer review, wherein an independent CPA reviewed my work. Similarly it is important to get your tax returns done by a professional CPA and have peace of mind.
    I provide complete solution to my clients by simplifying tax jargons, educating them about their returns; provide yearlong consultation, reply to IRS queries and notices.
    Importantly I personally work on my client’s tax returns they are not handed over to any other individual or firm.

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