Want more money back? Don’t miss these 7 new tax law changes
By Aimee Heckel
Imagine finding a suitcase of cash on the side of the road — with your name on it.
Although most people don’t get particularly excited about filing their taxes, that’s metaphorically what tax season can bring: extra unexpected money. Only, instead of in a suitcase, it’s behind the simple click of a few computer keys.
Every year, tens of billions of dollars in tax refunds and other assets go unclaimed, and a slice of that money may very well be yours. All you need to access it is a little education.
Lisa Greene-Lewis, a certified public accountant and tax expert with TurboTax, which guarantees 100 percent accurate calculations and your maximum refund, says some people do not get the refunds they are entitled to because they are unaware of the changes in tax law. This year, Greene-Lewis says there are a handful of new deductions and tax credits that consumers need to be aware of when filing their 2013 tax returns.
Here are seven changes that you should know:
1. Same-sex couples can now file jointly as married couples.
For the first time, same-sex couples nationwide can file jointly and receive the same benefits as other married couples. This means same-sex couples can claim a dependent to take advantage of earned income credits or dependent or education credits.
“This is one group of people who will have a lot to look forward to,” Greene-Lewis says.
This applies for couples who were married in a state that legally recognizes their marriage as a legal union — even if they do not currently live in that state, she says.
Tip: Greene-Lewis recommends using one of TurboTax’s tools that can help you decide whether it’s beneficial to amend your tax returns for the past three years. You do not have to do this, but it is one option some same-sex couples are choosing, she says. However, starting across the nation in 2013, if you are legally married, you must file jointly.
2. Don’t forget the earned income tax credit.
This is a federal credit that adjusts every year, for low- to middle-income taxpayers. The earned income tax credit can be worth up to $6,044, depending on your income and the number of child dependents in your home, Greene-Lewis says.
“Some people don’t take advantage of it, but our software asks questions related to you and gives you the credits and deductions you are eligible for,” she says.
3. Get more money back with dependent exemptions.
This tax credit is not new, but good news: It has increased, now reaching $3,900 per dependent.
“Sometimes people miss this one because they’re in such a rush and gather the incorrect Social Security number,” Greene-Lewis says. “You have to have the correct Social Security number for your dependent to get this exemption.”
4. Get deductions for medical expenses.
Again, this deduction is not new, but the amount is. The threshold increased from 7.5 percent to 10 percent of your adjusted gross income for 2013, according to Greene-Lewis. This may not make you happy: It means you have to have spent more on medical expenses to get this deduction.
5. Simplify your home office deduction.
In the past, it was challenging for people who work at home to deduct a home office. In fact, many avoided deducting their home office because they did not want to deal with itemizing each expense. Instead, you can now choose a flat deduction of up to $1,500, based on the square-footage of your home. This amount is calculated based on $5 per square foot, with 300 square feet the maximum you can deduct.
6. Understand Obamacare.
Any tax implications related with the Affordable Care Act and Obamacare do not affect your 2013 tax filings. However, next year, if you do not purchase insurance by March 31, 2014, you will receive a penalty on your taxes. This will affect your 2014 taxes that you will file in 2015.
However, when you do purchase your insurance, you can get a tax credit. You will have a choice whether you apply it to your insurance premiums, or receive it on your tax return in 2015.
7. Take advantage of the expiring tax provisions.
These are not new deductions or credits, but these tax provisions will be expiring after 2013’s filing, making this your last chance to benefit from them.
- The Teacher’s Educator Deduction: Teachers can deduct $250 for classroom supplies.
- The Tuition and Fees Deduction: Under this provision, you can get up to $4,000 for college expenses. But don’t worry, there are still other education credits available.
- A sales tax deduction for residents of states that don’t pay state taxes, like Florida and Texas.