2013 Tax Returns

What to Expect for 2013 Tax Returns

Another year has come to an end, which means that tax time is right around the corner. The rules for filing 2013 tax returns are similar to those from 2012, but with a few notable differences.

Tax Brackets

The tax brackets for 2013 are very similar to those of 2012. However, the Internal Revenue Service added a new tax bracket this year for the highest earners in the country. Taxpayers who earn the least amount of money will pay as little as 10 percent in tax, while those who make the most will pay up to 39.6 percent. In the past, the highest tax rate was only 35 percent.

Capital gains tax rates also increased from 2012. In 2012, those earners in the highest bracket paid a capital gains tax of 15 percent. For 2013, however, the top earners will pay up to 20 percent in capital gains tax.

Common Tax Credits

The Earned Income Credit will be available in 2013 and may save you up to $6,044 on your taxes. As in past years, not all taxpayers who qualify for this credit in 2013 will receive the maximum amount. The exact amount of your credit will depend on your income and the number of qualifying children you have.

Child Tax Credits are available in 2013 for a maximum of three children. Each tax credit may save you up to $1,000 on the tax you owe. The Child Tax Credit is also refundable, which means that you will receive a refund if your credit exceeds the amount of tax you owe.

Deductions and Exemptions

For 2013, the personal exemption amount will be $3,900. The standard deduction for single filers will be $6,100, and the standard deduction for taxpayers filing jointly with a spouse will be $12,200. Taxpayers filing as heads of household can take a standard deduction of $8,950. If you take the standard deduction, you won’t be able to claim any itemized deductions. However, you may still be able to claim certain adjustments to income, such as the tuition and fees, student loan interest, the cost of health savings accounts, moving expenses and the self-employment tax deduction.

Taxpayers who claim itemized deductions may face limitations for 2013 if they earn more than a certain amount of money. For example, if you file jointly with your spouse and earn more than $300,000, you may not be able to claim all of your itemized deductions. The limit for heads of household is $275,000, and the limit for single filers is $250,000.

Most of the itemized deductions allowed in 2012 will still be available for your 2013 tax return. Typical itemized deductions include medical and dental expenses, mortgage interest, mortgage insurance, mortgage points, state and local income taxes, car or boat registration fees, charitable contributions and casualty losses.

Important Dates

Your 2013 tax return and any payment you owe are due by midnight on April 15, 2014. This is also the last day to make a 2013 IRA contribution. If you file for an extension, your tax return will be due on October 15, 2014 instead.