1. TAX-AIDE Federal Tax Law Changes 2013

2. TAX-AIDE Federal Tax Law Changes 2013 ● New provisions ● Indexing ● Extenders ● Form change ● Due Dates NTTC Training – 2013 2

3. TAX-AIDE Medical Deduction Haircut ● Taxpayers can deduct amount of unreimbursed medical and dental expenses that exceeds 10% of AGI (was 7.5%) ● If 65 or older, threshold remains 7.5% NTTC Training – 2013 3

4. TAX-AIDE Capital Gains Tax Rate ● New 20% rate for higher income taxpayers NTTC Training – 2013 4

5. TAX-AIDE New Taxes ● Medicare tax on high incomes ● Net investment income tax for high income taxpayers ● Both apply if AGI exceeds $200,000 Single or HH $250,000 MFJ or QW $125,000 MFS ● Both out of scope NTTC Training – 2013 5

6. TAX-AIDE Social Security Tax Rate ● Employee portion of social security tax returns to 6.2% (was 4.2% for 2011–2012) Applies to self-employment tax too  Full social security rate now 12.4%  Total S-E tax rate 15.3% NTTC Training – 2013 6

7. TAX-AIDE Standard Deduction and Exemption Increases ● $6,100 – Single or MFS $7,600 – Single >65 or blind ● $8,950 – HH $10,150 – HH >65 or blind ● $12,200 – MFJ or QW $13,400 – MFJ, QW >65 or blind ● Exemptions increase to $3,900 NTTC Training – 2013 7

8. TAX-AIDE Standard Mileage Rates 2013 ● 56.5¢ per mile – business miles ● 24¢ per mile – medical miles ● 14¢ per mile – charitable miles NTTC Training – 2013 8

9. TAX-AIDE EIC Maximum Credits and Income ● $6,044 – three or more qualifying children ● $5,372 – two qualifying children ● $3,250 – one qualifying child ● $487 – no qualifying child ● $46,227 ($51,567 MFJ) 3 qualifying children ● $43,038 ($48,378 MFJ) 2 qualifying children ● $37,870 ($43,210 MFJ) 1 qualifying child ● $14,340 ($19,680 MFJ) no qualifying child NTTC Training – 2013 9

10. TAX-AIDE Deductible Long-Term Care Premium Limits ● Qualified long-term care premiums includible as medical expense on Sch A $360 – Age 40 or under $680 – Age 41 to 50 $1,360 – Age 51 to 60 $3,640 – Age 61 to 70 $4,550 – Age 71 and over NTTC Training – 2013 10

11. TAX-AIDE Other Indexing ● HSA Limits $3,250 self-only coverage $6,500 family coverage Both + $1,000 if age 55 or older ● Retirement savings credit income limits Max $29,500, $59,000 MFJ, $44,250 HH ● Max investment income for EIC $3,300 NTTC Training – 2013 11

12. TAX-AIDE Other Indexing ● IRA contributions Max $5,500 ($6,500 if age 50 or older) Modified AGI limits when covered by employer plan ● Lifetime learning credit income limits ● Excludible savings bond interest – out of scope ● Foreign earned income exclusion NTTC Training – 2013 12

13. TAX-AIDE Extended Provisions 2013 ● Tax-free distribution from IRAs to public charities for individuals age 70½ or older ● COD exclusion for principal residence ● Adjustment for educator classroom expenses up to $250 ● Adjustment for qualified tuition and fees NTTC Training – 2013 13

14. TAX-AIDE Extended Provisions ● Premiums for mortgage insurance deductible as interest for qualified residence ● Deduction for state and local general sales taxes ● Nonbusiness energy property credit NTTC Training – 2013 14

15. TAX-AIDE Form Changes ● Sch D new lines if all transactions on statement are Code A or D – basis reported to IRS with no adjustments ● Continue to enter all capital gains/losses on Capital Gains Worksheet in TaxWise TaxWise will carry to proper forms/lines NTTC Training – 2013 15

16. TAX-AIDE Due Dates ● 2013 tax returns are due Tuesday, April 15, 2014 ● 2014 estimated payments due April 15, 2014 June 15, 2014 September 15, 2014 January 15, 2015 NTTC Training – 2013 16

17. TAX-AIDE Tax Law Changes 2013 Comments? Questions? NTTC Training – 2013 17