What one word best describes the 2013 tax season? Chaotic? Uncertain? Worrying? All of the above?
Unfortunately, the only certain thing about the 2013 tax season is just how uncertain it’s going to be. With the Supreme Court upholding the Affordable Care Act and provisions in the Bush tax cuts set to expire, not only will tax season be challenging for your firm, but your own personal taxes will be challenging as well.
And that goes for your employees, too. So the solution is simple: Start preparing now!
Accounting Today provides a list of reasons why you should be making tax preparation a top priority if you aren’t already.
6 months to become an expert
Experts in the industry agree that good tax planning takes an average of six months. And in six months it’ll be March 2013 … from that perspective, there isn’t much time to dilly dally.
Six months prep can guarantee that experts have time to help you get all available opportunities for your firm, determine the best approach and implement the plan.
You can still benefit from tax breaks
With provisions from the Bush tax cuts set to expire at year’s end, now’s the time to see if you can take advantage of these breaks while they’re still able to be utilized.
Rates are set to increase on:
- federal income taxes from 36% to 39.6%
- long-term capital gains from a maximum tax rate of 15% to 20%, and
- dividends to be taxed as ordinary income.
In other words — act now!
Estate tax increase
Unless Congress takes action, the seemingly-everchanging estate tax will increase from 35% this year to 45%, and the lifetime exemption amount will go down from $5.12 million to $1 million.
These changes will certainly affect your 2013 outlook, especially if you run a small or family-owned business.
Larger reach for Alternative Minimum Tax
The Alternative Tax Exemption, or AMT patch, is set to drop from $74,450 this tax year to $45,000 next year. So, not only will more people pay the AMT patch, but the increase in taxable income will lead to more taxes for people to pay next year.
If this didn’t apply to you before, the substantial drop to $45,000 could mean it applies now.
Are you preparing for tax season yet? What advice would you give other firms? Let us know in the comments below.
