2013 Tax Changes


This is the time of year where people start getting organized for tax preparation. What other services do you offer to individuals other than tax preparation?


Life is full of changes and surprises, and most of them have financial implications. The key is planning for these changes. I can assist individuals as they approach major financial milestones as well as represent clients in front of the IRS and assist them in resolving back taxes or negotiating settlements.


Would you be able to help someone looking to start their own business?


Absolutely. A methodical plan of action is needed to fulfill your dream or goal of running a successful business. I can help aspiring entrepreneurs avoid the common pitfalls that many new small business owners make along with monthly or quarterly accounting needs.


We’ve heard so much about the “fiscal cliff” recently. What does that actually mean for taxpayers?


First, it’s important to understand what the term “fiscal cliff” means. The “fiscal cliff” is a term used to describe the convergence of two events on December 31, 2012—the expiration of almost every tax cut enacted since 2001 and a scheduled reduction in government spending. Ultimately, this means that 90 percent of households may experience a tax increase. Additionally, taxpayers can expect a delayed tax filing season, delayed tax refunds and having to file amended tax returns to retroactively incorporate tax changes that could not be timely implemented by the tax filing deadlines.


As a result of the “fiscal cliff,” we’ve also heard that there may be new tax changes for 2013. Can you briefly explain some of the changes that can be expected?


In the absence of any legislative action, many prior tax provisions, including the Bush-era tax cuts, the estate tax exemption, the payroll tax reduction and the lower capital gains tax were set to expire at midnight on December 31. For taxpayers, this means:


Several provisions that benefit the lower-income classes—most notably the increased child tax, the earned income and expanded education credits are slated to expire.


The estate tax exemption and tax rate were at $5,120,000 and 35 percent, respectively. Taxpayers can expect the exemption to drop and the tax rate to increase.


The lower 4.2 percent rate for employees’ portion of the social security payroll tax expired and will revert to 6.2 percent.


These are just a few examples. If you haven’t already consulted your CPA or financial advisor, I highly recommend having that conversation immediately.

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