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    2013 Tax Year


2013 Tax Law Changes

Many of the changes to the tax code in 2013 can be traced to the sweeping tax cuts approved by Congress back in 2002. However, some changes were directly impacted by energy costs, the recent economic downturn, and the shutdown of the U.S. Government in 2013.

Below is a summary of the major 2013 Tax Law Changes:

2013 Tax Year Refunds Will Be Delayed

Thanks to the federal shutdown, the IRS has announced that it will delay the start of the 2014 filing season. In a statement, the IRS advised taxpayers and preparers that it needed the extension to "allow adequate time to program and test tax processing systems following the 16-day federal government closure."

For taxpayers, especially those who had filed an extension, the shutdown could not have come at a worse time. On October 15, 2013, as 10 million taxpayers were filing their returns, the government was shuttered. That has led to a serious backlog for the IRS, forcing the planning and testing for next season to also get pushed back.

While the tax season is supposed to start on January 22, 2014, it will now begin on January 31st. Refunds will be impacted by this delay, and the shortening of this year's tax season could make for a very compressed tax season.

Mileage Rates Boosted

As energy costs have fluctuated wildly over the past couple of years, the IRS has been forced to adjust mileage rates in the middle of the year to reflect those increased costs. However, for 2013, the IRS was able to issue a single set of standard mileage rates for the entire year.

For miles driven for business use between January 1 and December 31, 2013, the IRS permitted a standard mileage rate of 56.5 cents per mile. This amounted to one penny more than the mileage rate from 2012.

Taxpayers who used their vehicles to get medical care between January 1 and December 31, 2013 saw their deduction rise to 24 cents per mile. This was a slight increase from the 23 cents per mile rate established in 2012.

For 2013, the charitable mileage deduction was set at 14 cents per mile, and remained unchanged from 2012.

It's important to keep proper documentation to support your deductions. Ensure that you record begin and end odometer readings, the date that you made the travel, and the specific reason for claiming the mileage rate deduction. Common financial software like Quicken, QuickBooks, and Mint can help keep track of these.

The IRS has already announced mileage rates for 2013. Beginning January 1, 2014, the standard mileage rate will increase to 56 cents per mile for business miles driven. Also, miles driven for medical or moving purposes will decrease slightly to 23.5 cents per mile. The charitable mileage deduction will remain unchanged at 14 cents per mile.

 

 

Standard Deductions for 2013 Tax Returns

For most people who don't itemize deductions, the basic standard deduction increased slightly. In 2013, the standard deductions were:

  • $8,950 for head of household (up from $8,700 in 2012)
  • $12,200 for Married taxpayers filing jointly and qualifying widows or widowers (up from $11,900 in 2012)
  • $6,100 for married taxpayers filing separately (up from $5,950 in 2012)
  • $6,100 for single taxpayers (up from $5,950 in 2012)

Taxpayers are not able to claim the standard deduction if someone else can claim you as a dependant on their tax return.

 

All information is believed accurate at time of transmission, and no tax advice is implied. Always consult your tax professional if you have questions.

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