Tax Season Tips: The Dos And Don’ts When You’re Filing

Welcome to Tax Season 2013. New rules, regulations and stipulations have added a steeper learning curve this year for filers. Don’t worry, we’re here to help. With internet services leading more and more people to file for themselves, some less obvious rules and warnings have been overlooked. Here are a few things you might want to ask your accountant.

Affordable Care Act

In order to fund the new Affordable Care Act, individuals with an income of more than $200,000 or married couples filing jointly with over $250,000 will be responsible for a 3.8% surcharge. Sure, this is aimed at higher-income families but the relatively low threshold will certainly affect married couples or middle class income filing jointly.

Social Security Wage Ceiling

One of the most talked about changes of this year’s tax law is the raising of the taxable wage ceiling to $113,00

0 to fund Social Security. There is no limit to the taxable wages for Medicare; however, an additional .9% will be assessed for individuals making more than $200,000.

Relief for Low-Income Workers

As part of the new 2013 tax laws, eligible low-income workers and families will reap the benefits of a relief in place to help ease their financial woes. The earned income tax credit is a refundable credit that reduces or eliminates tax paid. In other words, double check to see if you qualify and you might not have to pay a dime in income tax this year.

Higher Rates for Higher Incomes

For one thing, high-income filers will see an increase in their obligation – raising the rate from 35% to 39.5% for single citizens earning $400,000 or more and married couples earning over $450,000. Also, our 2% Social Security reduction has expired, meaning we now pay 6.2% of our income as opposed to the 4.2% from the past two years.

Regardless

of your financial situation, these new tax laws will certainly alter your filing – either for better or for worse. Low income families might be able to take advantage of the earned income tax credit, while it seems high income individuals will be footing the bill to make up for it. Higher tax rates for Social Security, payroll and the Affordable Care Act will be hurting in the wallets of many Americans, and are reason to watch your return carefully. So if you are filing online, be smart. If you hire a personal accountant, ask the right questions. And most importantly, be sure to safeguard yourself against identity theft while you are sharing your vital personal information.

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Jason Sherman is a former accountant and enjoys writing about financial news and offers money advice to his readers.