Every year, laws can change and affect your tax situation. Here are some examples:
- Inflation adjustments – Each year cost of living adjustments apply to tax brackets and various other numbers. For example, the dollar amount for a personal exemption rose from $3,800 on tax returns for 2012 to $3,900 on tax returns for 2013.
- Income tax rates - For a number of years, the highest individual income tax rate was 35%. As of 2013, the 39.6% rate has been reinstated.
- Phase-outs - Also reinstated for 2013 are rules that phase out personal exemptions and itemized deductions, when income exceeds specific levels.
- Net investment income tax - A new 3.8% surtax on net investment income (including interest, dividends and capital gains) applies if overall income exceeds specified levels.
Talk to your tax advisor for more details.
Last updated on January 31, 2014