After last year’s fiasco, I’m happy to say we are able to include the 2013 tax guide in this month’s issue. Thanks to the passage of the American Taxpayer Relief Act of 2012 here., the tax rates and line item numbers for 2013 were set before we went to press. You can see the guide
There are lingering issues from the partisan battles affecting your tax returns, however. As we went to press, the Internal Revenue Service (had yet to formally announce when they would start accepting 2013 returns. The agency anticipates the delay being limited to no more than a maximum of two weeks. The partial government shutdown interfered with planned updates the IRS makes to accept the current tax year’s returns. By the time you read this, a date may be announced. The deadline for filing, or requesting an extension, remains April 15.
The partial government shutdown also delayed the announcement of various 2014 deductions, credits and income ceilings. We’ve used actual figures when available and projections from what we consider to be reliable sources for others. I intend to have the online version of the tax guide updated as we get more information. Some tax break extenders, including the ability to deduct state and local sales taxes and the option to make charitable donations from an IRA in lieu of taking required minimum distributions, will expire when you pop the champagne on New Year’s Eve if legislators do not act before then.
Extra taxes may be owed by those of you who own mutual funds (as well as potentially some closed-end funds and ETFs). Distributions of capital gains are expected to be larger this year than at any time since the financial crisis, according to Jason Kephart of InvestmentNews. New market highs and five years of upward-trending stock prices have left fund managers with relatively few losses to offset realized gains. The result is a higher tax liability for shareholders. Check with your fund company to see if they intend to distribute capital gains this year.
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