End-of-Year Tax Tips and New Tax Laws - Are You Prepared?

CITRUS HEIGHTS, Calif., Nov. 20, 2013 /PRNewswire/ -- TaxAudit.com, the IRS audit experts that defend more than 20,000 Americans under audit each year, today released its annual end-of-year tax tips for U.S. taxpayers.

Reminders for fourth quarter tax planning:

• Know your tax rate: While ordinary federal income tax rates for 2013 will remain the same, the fiscal cliff legislation passed earlier this year affects higher-income individuals and puts them in the 39.6% tax bracket (up from 35%).
• Consider leveraging itemized deductions by bunching deductible expenditures every other year, while taking the standard deduction in intervening years.
• Consider deferring income if you expect to be in the same or lower tax bracket for 2014.
• Consider the tax impact of selling appreciated securities by timing your investment gains and losses. Selling some loser securities before year end may also be a smart tax strategy.
• Take advantage of the special tax breaks available to you if you make charitable contributions directly from your IRA; special rules apply.
• Remember that significant lifestyle changes like divorce, a job change, retirement or becoming a home buyer affect your taxes.
• Spend down flexible spending accounts before those balances expire.
• Go green: Purchasing energy-efficient appliances can mean big tax credits.

Changes to IRS tax laws effective for 2013 - know which changes affect you:

• Rules for home office deductions have changed. New this year is a simplified option for a maximum standard $1,500 deduction.
• Rules for depreciation have changed.
• Many refundable credits are disappearing.
• A new 3.8% Medicare Investment Tax and a 0.9% Medicare Health Insurance Tax will affect many higher-income individuals due to recently enacted health care legislation.

Tax provisions expiring after 2013:

For individuals:

• Above-the-line deduction for certain expenses of elementary and secondary school teachers.
• Deduction for state and local sales taxes.
• Above-the-line deduction for qualified tuition and related expenses.
• Deduction for mortgage insurance as qualified interest.

For businesses:

• Research and experimentation tax credit.
• Work opportunity tax credit.
• Increase in expensing to $500k/$2M and expansion of definition of $179 property.
• 15-year straight-line cost recovery for qualified leasehold, restaurant and retail improvements.

Please note: This is only a short list of some of the new and evergreen tax deductions for 2013. Please spend time with your tax preparer and learn the rules at IRS.gov so you and your advisor are knowledgeable about qualifying expenses, eligible purchases, contributions, gifts, etc. so you can reduce your tax burden.

For more information, please visit www.taxaudit.com.

About TaxAudit.com
TaxAudit.com is the largest and fastest-growing audit defense service in the country for taxpaying individuals, small businesses and tax preparers, with nearly 4 million members and 20,000 audits handled and resolved each year.

TaxAudit.com offers prepaid IRS audit representation and defends taxpayers from the moment they receive an audit notice through to the best possible resolution. TaxAudit.com members receive expert tax representation, relieving taxpayers from the nightmare of being audited, at a price point any taxpayer can afford.

TaxAudit.com is headquartered in Citrus Heights, CA. 

SOURCE TaxAudit.com