As many of us are sorting through tax documents for the 2013 filing season, there are some important changes coming up in 2014 that will affect the way you plan your finances and budget for the coming year.
1. Additional 2013 taxes for high earners. Tax year 2013 marked the start of two new taxes for high earners: a 0.9% Medicare tax and a 3.8% tax on unearned/investment income. If you are subject to these, be prepared to pay them by April 15, 2014. Good planning throughout the year can go a long way.
2. Joint returns for same-sex couples. Since the recent Supreme Court ruling DOMA, married same-sex couples can now file joint federal returns. It is also possible to amend past returns (from up to three years) to reflect the filing status.
3. Tax breaks expiring at the end of 2013. If you have relied on certain tax breaks the last few years, you may be disappointed to find out that some are expiring at the end of 2013.
These include:
• Credits for certain energy-efficient home improvements
• Deduction for university tuition and fees
• Deductions for teachers who purchased classroom supplies out of their own pockets
• Deduction for PMI payments
4. Changes from the debt-ceiling battle. Tax changes are inevitable if there is another debt-ceiling battle. If there is another government shutdown, delays could be seen during the tax filing season. The best advice is to get your tax return prepared as early as possible so you are not trying to figure out what to do when delays become a problem.
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