The major changes in the coming years due to Obamacare have the most affect on higher income individuals. However, a few things should be kept in mind when filing taxes for 2013. First and foremost, taxpayers should make sure that their filing status is correct. Whether filing as head-of-household or married filing jointly, the filing status is the most important assessment a taxpayer makes when filing their taxes. If you have questions about your filing status, consult an attorney, tax professional, or us here at SG Law Group.
Other, more precise changes to the 2013 tax year include the increase in the medical deduction amount to qualify, simplification of the home office deduction, and same-sex marriages. In the past, medical expenses could only be deducted if the amount of medical expenses exceeded at least 7.5% of the individual’s gross income. This percentage of income threshold has now been increased to 10%. This means that medical expenses must be a larger percentage of the taxpayer’s adjusted gross income than in past tax years to qualify for the deduction.
In contrast, the home office deduction has been made easier to file. Previously, taxpayers had to make a subjective determination of the percentage of their home used for their personal business. Now the home office deduction has been changed to include a standard multiplier for the amount of square footage used for the home office. Of course, the traditional form of calculating home office deductions is still available to taxpayers.
Lastly, for the first time this year, the federal government will be recognizing same-sex marriages for tax purposes. Legally married couples, regardless of their sexual orientation, will have the option of filing jointly or married filing separately. This is true notwithstanding whether the state recognizes same-sex marriage. However, because of the separation of federal and state law, the federal allowance of same-sex marriages will not help persons in states where same-sex marriage is not recognized for state tax purposes. Keep in mind that same-sex couples must have been married in a state that authorizes same-sex marriages. Additionally, the IRS does not include the following relationships: registered domestic partnership, civil unions, and other relationships the state authorizes that is not recognized as a marriage. Therefore, forms are not eligible for filing jointly or separately on a tax return.
As a word of advice, as you begin your new tax year, always remember, within reason, to conduct your affairs with tax repercussions in mind. If you have an event that has extra large consequences to a large percentage of your income, check with your chosen tax professional to obtain professional advice, or call us here at SG Law Group.