2013 filing season update
Delayed due to the late passage of 2012 tax law changes in January, Internal Revenue will begin accepting business tax returns on Monday February 4th (1120, 1120S, 1065, 990 and 720 tax returns). However, if your business tax return requires any of these forms, you’re still on hold until while those forms are updated. The full press release can be read here.
The same release indicates that individual taxpayers filing with education credits will have to wait until mid-February while form 8863 is being revised.
IRS simplifies home office deduction in 2013
In a move to reduce the record-keeping and time consuming burden of claiming the home office deduction for businesses, the IRS released Revenue Procedure 2013-13 today to offer an alternative to calculating the deduction. The usual regular and exclusive use tests still apply, but the revised ‘short-form’ is touted as being a simplified option for the 2013 and future tax years. Today’s IRS-issued Newswire reads:
“The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually.
“This is a common-sense rule to provide taxpayers an easier way to calculate and claim the home office deduction,” said Acting IRS Commissioner Steven T. Miller. “The IRS continues to look for similar ways to combat complexity and encourages people to look at this option as they consider tax planning in 2013.”
2012 electronic filing season opens for most taxpayers on January 30, 2013
The IRS has announced that it will begin accepting e-filed 2012 income tax returns on January 30, 2013 for the majority of taxpayers.
Taxpayers that file their taxes with the following forms will not be able to file until later due to late changes in laws that require more programming:
- Form 5695 – Residential Energy Credits
- Form 4562 – Depreciation and Amortization
- Form 3800 – General Business Credit
A full list of forms that will not be available on January 30th can be found here.
The news release can be read here.
Tax rules for the future finally take shape
On January 1, 2013, the U.S. House passed the bill we’ve all been waiting for. Covering a vast array of tax and budget topics, the bill presently awaits the President’s signature.
Highlights include:
- The 2011-2012 Social Security tax break expires on 1/1/13, returning the employee-share of the tax to the pre-break rate of 6.2%
- Increases in both ordinary and capital gains tax rates for those households earning $450k or more per year; the maximum ordinary tax rate increases 13% to 39.6%, capital gains rate in this income category increases 33% to 20%
- Permanent extension of the Alternative Minimum Tax exemption (retroactively to 2012)
- 401(k) balances can be rolled over into a Roth IRA without restrictions such as changing jobs or retiring…the rollover is a taxable event as in the past
Details are still emerging and the IRS will now have some rewriting to do. Bear in mind that the above increases do not factor in the new taxes on investment income effective 1/1/13 (see previous entries on the matter below). Commentary and more details can be read here and here, and a great summary of the provisions can be found here.
Ohio ends Estate Tax on January 1, 2013
The Ohio Estate Tax has been repealed for estates of individuals passing away on or after January 1, 2013. You can read an information release about the change here, or the Estate Tax FAQ section here.
Curious about how the “fiscal cliff” will impact you?
An interesting tool can be found at the Tax Policy Center to get an idea of what 2013’s tax changes are going to cost you.
