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The Individual Investor’s Guide to Personal Tax Planning 2013 — Updated
This article has been updated to reflect that the projected 2014 tax rates have been confirmed by the IRS as of January 6, 2014.
The American Taxpayer Relief Act of 2012 (ATRA), signed into law at the start of 2013, simplified planning for the current tax year.
Following the uncertainty that existed at the end of 2012, this clarity was a welcome change. The revisions covered most of the tax code as it applies to individuals. Since the comprehensive legislation was passed in early January 2013, there has been little additional change beyond extending to married same-sex couples the same treatment as common-law married couples under the tax code.
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We cover the changes included in the ATRA as they apply to 2013 and 2014 in this guide. We also cover the tax changes included in the Affordable Care Act. A higher floor for deducting medical expenses went into effect this year for those under the age 65. High income earners face two new Medicare taxes.
Those who like to file early will have to wait an extra 10 days. The Internal Revenue Service (IRS) is delaying the starting date for when returns will be processed to January 31 because of the partial government shutdown. The deadline for filing a return or claiming an extension will remain April 15, however.
For 2014, several tax breaks, including the exclusion from gross income of qualified charitable contributions made from a traditional individual retirement account (IRA), expired on December 31, 2013.
Several line item numbers, including the standard deduction and mileage deductions for 2014 were announced in late December by the Internal Revenue Service. This delay was due to the partial federal government shutdown. We have updated these tax figures here.
Regardless of changes made to the tax laws, one thing is constant—you still have to pay taxes. Furthermore, even a simplified tax code is still likely to be too complex; hence the need for tax guides. As has been the case in years past, our tax guide provides an overview of the tax rates and deductions likely to impact the majority of AAII members. Since there are many details, loopholes and pitfalls within the tax code, it is impossible for this guide to provide enough details to cover specific tax situations. If you have questions, consult a tax professional. It is your tax return, and the IRS will hold you responsible for any errors made on it.
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