Could there be more money in your future? Perhaps you’ve heard about the new shifts in money set to take place in 2013. It actually sounds interesting, but you just have to wonder — what’s really in it for you? Certain changes may apply to federal tax regulations and benefit rules at the beginning of 2013 ad just about every taxpayer will be affected. Now is the time to start thinking about your financial future and begin planning for these changes.
Prepare for Tax Cuts from the Bush-Era to Expire
Although the vast majority of the attention has been focused on taxpayers with deep pockets, the truth of the matter is that all taxpayers may have to deal with higher taxes. The 10 percent bottom bracket is scheduled to disappear. Instead the new bottom bracket is set to rise to 15 percent. There are also automatic federal spending cuts at a whopping $100 billion that will begin as the new year comes in. Extended jobless benefits will also expire during this time.
Changes in Estate and Gift Taxes
The wealthy will be able to leave beneficiaries up to $5.12 million but the kicker with this is that they have to be pass away to enjoy the benefit. Also applying to this ceiling is one’s lifetime exemption from gift taxes. During 2013, the estate and gift tax exemptions will fall to $1 million. What’s more the tax rate placed on transfers that rise above the exemption ceilings will increase to 55 percent – up from 35 percent.
Look for Modifications in Healthcare Reform
Healthcare reform changes spark a substantial tax changes that will greatly affect 2014 tax returns. A person earning more than $200,000 or couples with a combined income of $250,000 can plan on an increase in Medicare payroll tax amounts. The shift will go from 1.45 percent up to 2.35 percent. These same individuals may also see an additional tax of 3.8 percent on their net investment income. Also, you will only be able to deduct reimbursed medical expenses that go beyond 10 percent of your taxable income. The current ceiling is 7.5 percent.
Enrollment in Medicare
Medicare has extended the time a person can enroll for 2013 benefits from October 15 to December 7. Because of Healthcare reform, there has been huge changes in the Medicare Advantage and prescription drug plans. It may not be beneficial to keep your current plan. Instead you should see how competing plans compare to yours and make your decision from there.