March 18, 2013

Tax changes for the year 2013

There are several tax changes every year affecting the tax returns. Tax changes for the year 2013 are as follows:

- In year 2013, Standard deductions are increased to $12,200 for those married filing jointly, $8,950 for those filing as head of household, and $6,100 for those filing as single.

- The top estate tax rate is 40% and the estate tax exemption is $5.25 million.

- For capital assets acquired in 2013, Section 179 deduction is up to $500,000

- Also 50% bonus depreciation is allowed for the assets that are qualified assets which are placed in service by the end of year 2013.

- In year 2013, the personal exemption amount is $3,900 which was a raise as compared to last year.

- For people who want to contribute  to their 401(k) plan for 2013, they can contribute up to $17,500

- There are following income brackets; 10%, 15%, 25%, 28%, 33%, 35% and 39.6% individual tax rates for 2013.

-  Mileage rates for business are increased to $0.565 and medical are increased to  $0.24 respectively.

-  For people 50 or older, the IRA contribution limit is increased to $5,500 or $6,500.

- The taxable wage limit for social security was increased to $113,700.

- The employee Social Security tax rate is put back to 6.2%. Also, the Social security tax rate under SECA (self-employment tax)is put back at 12.4% Digg Google Technorati Yahoo!

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March 8, 2013

Qualifying Widower status in tax year 2012- getting yourself the highest standard deduction amount

Qualifying widower status in tax year 2012 is available if your spouse died in year 2011 and you filed a married filing jointly return for tax year 2011 & did not remarry in 2011 & 2012. You may be eligible to use qualifying widow(er) with dependent child as your filing status for 2 years following the year your spouse died.So as per above situation, if you fulfill all the required pre-requisites, you can claim qualifying widower status even for tax year 2013.

The biggest advantage of Qualifying widower status is that you get to use joint return tax rates and claim the highest standard deduc­tion amount , remember you get to claim standard deduction only if you do not itemize deductions.

Following are the conditions for getting qualified for Qualifying widower status:
- You filed a married filing jointly return for the tax year in which your spouse died
- The surviving spouse doesn't remarry
- You need to have a dependent child- may be your own, adopted or stepchild, but cannot be a foster child.
- This child has lived in your home ALL year (ex­cept for cases of temporary absences, child born or died or kidnapped during the year)
- As a taxpayer you should have paid MORE than half the cost of keeping up that home for the year.

Along with other benefits, there is a very big benefit that you can claim your dependent in dependency exemptions as well if you qualify for dependency exemptions. Please make sure that before applying the above benefits, you always consult with your tax preparer or you choose a very helpful online tax preparation tool like Turbotax. Digg Google Technorati Yahoo!

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March 6, 2013

Homeowners' tax benefits for 2013

For homeowners, 2013 tax structure has been very good in terms of providing them benefits.
One of the benefits is that the Congress did not repeal or amend the right of taxpayers to deduct mortgage interest. But, in case you are a high income earner, things can be different.If you are single & earn more than $ 400,000; married and earn more than $ 450,000; your personal exemptions will be phased out. Also, your itemized deductions can get limited.
Now, coming to specific homeowners' tax benefits for 2013:
- Federal tax deduction for mortgage insurance premiums- The first one is the federal tax deduction for mortgage insurance premiums. The homeowners who pay mortgage insurance premiums, can claim this deduction as an itemized deduction for years 2012 & 2013 federal taxes. This deduction was taken at the end of 2011 but it was restored to the tax payers on Jan 1, 2013. This deduction applies to private mortgage insurance premiums and Federal Housing Authority and Veterans Affairs premiums as well. To avail this deduction, the method of presenting it in the tax return is to itemize deductions on your federal income tax. So keep in mind that you will be able to claim 25% of what you have actually spent. Now, compare it to the standard deduction you are eligible for & decide that what is better for you.

- Credit for green improvements-The second one is a credit(yes! it goes directly off from your federal TAX). Its a Credit for green improvements. Its a credit, so its deducted directly from the amount you owe towards federal tax. The tax credit is 10% — for up to a maximum of $500. The eligibility criteria  for availing this credit is to purchase and install certain products like biomass stoves using qualified fuel, qualified new water heater, furnace, boiler, heat pump, central air conditioner, insulation, windows or roofing for your home. Also, a very important thing is that you can claim the credit for the tax year in which the appliance was installed & not just purchased. You will need to file IRS Form 5695  along with your income tax to claim the credit. Digg Google Technorati Yahoo!

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February 11, 2012

2011 Turbotax Snaptax- How Snaptax can help you with Turbotax in 2011

2011 Turbotax Snaptax is a very new downloadable app for iPhone and android phones featuring how Snaptax can help you with Turbotax in 2011. The idea behind this Modernized e-file system is to follow trends going on in the real world which is mobile, from smart phones to tablets & making tax filing a very simple task for the people. You have just to answer the easy questions that follow. This finds ALL deductions for you to get you the biggest refund. Turbotax being the Best tax preparation software 2011 is famous for features like Maximum Refund guaranteed , Protection of information, fastest possible refund & 100% guaranteed calculations, offers the same benefits with Snaptax 2011 too.
How Snaptax can help you with Turbotax in 2011:
Taxes-on-the-go with 2011 Turbotax Snaptax applications are a natural next step to the explosion in electronic filing. This allows the tax form 1040 to be filed directly from your iPhone or android. The way it works is that you take pictures of documents like the W-2 form, and an optical reader in the application imports the photos into the tax forms. Valla! That was easy!!!!!!!!
You can download the application for free, but you have to pay a cost for filing. Electronic filing can speed the processing of your tax return. And, if you choose direct deposit, you’ll get your refund much more quickly in as few as 10 days. More than 112 million tax returns were filed electronically last year, which is up 13.7 percent from the previous year.
So, with 2011 Turbotax Snaptax being the best in snap & touch technology of efiling the tax returns, you don’t have to worry where to enter the information on your tax form 1040. This is the best thing that has happened to the modern tax filing. Go ahead & download free!! Digg Google Technorati Yahoo!

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