According to Michael Loftus, Managing Director Loftus Wealth Strategies, “As the end of the 2013 tax year approaches, set aside some time to evaluate your situation.” Here are some things he suggests we keep in mind while we consider potential year-end tax moves. These thing include:
1. The tax landscape has changed for higher-income individuals
This year a new 39.6% federal income tax rate applies if your taxable income exceeds $400,000 ($450,000 if you’re married and file a joint return, $225,000 if you’re married and file separately). If your income crosses that threshold, you’ll also be subject to a new 20% maximum tax rate on long-term capital gains and qualifying dividends (last year, the maximum rate that applied was 15%).That’s not all–you could see a difference even if your income doesn’t reach that level. That’s because if your adjusted gross income is more than $250,000 ($300,000 if you’re married and file a joint return, $150,000 if you’re married and file separately), your personal and dependency exemptions may be phased out this year, and your itemized deductions may be limited.
2. New Medicare taxes apply