New laws will affect 2013 tax filing

Rick Bloom for HometownLife.com writes: Most people believe that since they've filed 2012 tax returns, they don't have to think about taxes for another year. Unfortunately, that is not the case. To be efficient and to make the tax laws work for you, you do have to think about taxes 12 months a year. It is important to have an understanding of our tax laws. This year, several new tax laws will impact many filers. Some of the changes are due to the American Taxpayer Relief Act of 2012, which was signed into law this year as a compromise to the fiscal cliff issues. Other new tax laws go into effect because of Obamacare. Following is a sampling of some tax law changes.

Health care act

This year, because of Obamacare, a new 3.8-percent Medicare investment tax will be imposed on investment income regarding such things as interest, dividends and capital gains. This new tax is not for everyone, but does impact single taxpayers with adjusted gross income that exceeds $200,000 and for married couples with adjusted gross income that exceeds $250,000. This tax is in addition to the new Medicare tax on earned income. Earned income is income from your wages. This new Medicare payroll tax is 0.9 percent and it applies to the same taxpayers as the new Medicare investment tax.

Another change this year in the tax law deals with the medical expense deduction. In the past, there was a 7.5-percent income threshold for deducting non-reimbursed medical expenses. This year that number is increasing to 10 percent. It applies to all taxpayers up to age 65. Taxpayers older than 65 can continue to use the 7.5-percent number until 2017. The result of this change is that less people will be a able to deduct medical expenses on their tax returns.

Talking about deductions, one nice thing the IRS did for 2013 is reduce the record keeping requirement for home office deductions. If you qualify for a home office deduction, you can use a new optional deduction which is calculated at $5 a square foot and is capped at $1,500 a year. This relieves taxpayers of burdensome record keeping.

High-income taxpayers

The year 2013 will also bring other increases for high-income taxpayers. The ordinary income tax bracket is raised to 39.6 percent for those single with taxable income over $400,000 or married with income over $450,000. In addition, when you reach those thresholds, your capital gain rate will rise from 15 percent to 20 percent.

Also in 2013, certain tax breaks were renewed, such as the qualified tuition deduction and the ability to contribute up to $100,000 of your minimum required distribution directly from your IRA to a charity.

I believe the goal is to have more money in your pocket. Therefore, don't do anything for tax reasons alone, do things that make good economic sense.

You don't have to be an expert on tax laws. However, being informed about taxes will help you be more efficient and ultimately means more money in your pocket — exactly where it belongs.

Good luck!