|Here’s what’s new in tax world|
|Written by Jim Robertson|
|Tuesday, January 22, 2013 9:15 PM|
What’s new? In the world of your personal tax return for the year 2012, the answer is not much.
There were some credits and deductions that were scheduled to go away but the last minute compromise restored most of them.
When our beloved elected officials start talking about tax rate increases they are referring to future rates, so your paycheck this year may be looking a little different as more is taken out to meet with these increases.
Some things which have stopped and were not restored are things like the first time home buyer credit and refundable adoption credits, which is why there are a couple of lines way down the form in the tax credit area which have the designation “Reserved”.
Mileage for business purposes is still 55.5 cents per mile. Educators can still take an income deduction on the first part of their expenditures for their students.
Tuition and fees deductions for taxpayers unable to use education credits on Form 8863 are still there. Deductions of distributions given to a qualified charity from retirement sources(IRAs, pensions and annuities) are still deductible.
The election to use state and local sales taxes versus income taxes as deductions is still among those items restored. The deduction for mortgage insurance premiums is still deductible.
I do tend to laugh at some of the advertising that we are inundated with during tax season, like the gal who read the entire text of the Affordable Care Act (Obamacare) and proclaimed herself ready to do battle with it.
Good for her. Most of the provisions are just now kicking in this year(2013) and will have little or no effect on the preparation of your personal tax return for the year 2012.
You will see a difference on your W-2 next year as your employer will be forced to report the amount spent on health care in box 12 with a code of DD. Fitting in a way since the act seems to be a little pendulous.
Now we get down to my annual warning: Don’t be in too much of a hurry. Make sure you have all of your paperwork before trotting off to see your preparer.
Just because you didn’t get a form from someone does not relieve you of the responsibility of reporting the income. Besides this year, the system doesn’t accept tax forms filed electronically or otherwise until January 30th.
Now a note for all of you Earned Income Tax cheaters and you know who you are.
Uncle is getting tough with your preparer. Judging from the amount of emphasis placed upon the topic during continuing education and the heightened attention that will be paid to the due diligence forms that your preparer must complete with regard to claiming the credit for the taxpayer the following should be said:
Don’t try to claim dependents that aren’t yours to claim. Stop passing around kids within a household.
There can only be one head of household, not three different adults splitting up the kids to maximize credits.
The IRS has basically enlisted preparers to be their watchdogs through the threat of fines and imprisonment and quite frankly, your preparation fee ain’t worth $1,000 and a year or two in the slammer.
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