With the fiscal cliff averted and the IRS finally processing
income tax returns, H&R Block (NYSE: HRB) offers six facts to navigate tax
season 2013. Even though the IRS indicated some forms will not be updated until
as late as March, 98 percent of all taxpayers should be able to file their
returns now.
"Slightly smaller paychecks and tax season starting
later than in the past makes it even more important to make smart money
decisions to make ends meet." said Andrew Jensen, master tax advisor at
H&R Block. "No matter how taxpayers want to file their income tax
return, H&R Block can help."
H&R Block, with 11,000 offices, H&R Block At Home®
do-it-yourself solution and mobile apps, helps taxpayers file a return anyway,
anywhere, anytime. For the 60 percent of filers who seek assistance from a tax
professional, it's important to note that all H&R Block tax professionals
sign every return they prepare. In fact the average H&R Block client is
served by a tax professional who has more than a decade of experience and
hundreds of hours of training. H&R Block At Home, which serves do it
yourself filers, is backed by the first-in-the-industry research and analysis
group, The Tax Institute, which includes CPAs, tax attorneys, enrolled agents
and former IRS agents.
According to a survey conducted by The Tax Institute, many
families already were bracing for the later-than-normal start to the tax
season. The survey found that almost 1 in 3 taxpayers planned to use their tax
refund to pay loans, credit cards, holiday bills and utilities. Another 13 percent
of taxpayers will be putting off spending money on bigger items due mainly to
the delayed start of e-filing.
Armed with these are six facts about this tax season,
taxpayers may be a little more prepared financially this year.
1. Sticker shock: 2-percent payroll tax holiday ended – All
workers get less annual take-home pay compared to last year because the Social
Security payroll tax returned to 6.2 percent. That's more than $80 a month less
for someone earning $50,000 a year.
2. Family friendly tax breaks extended – More than 70 tax
provisions that expired Dec. 31, 2011, were extended retroactively. This
impacts all income levels and includes many tax breaks for families. Following
are some of the more popular extended tax breaks:
• The Child Tax Credit, set to be cut in half, was extended
and is $1,000 per dependent child (was set to expire Dec. 31, 2012)
• State and local sales tax itemized deduction – with the
greatest impact on the millions of taxpayers who reside in states with no
income tax
• Educator expense deduction – available for teachers, up to
$250 to help cover unreimbursed classroom expenses
• Mortgage insurance premium – deductible as interest paid
for a qualifying residence
• Charitable distributions from IRAs – non-taxable up to
$100,000.
3. Millions eligible to claim casualty losses –There were
many natural disasters in 2012, including Hurricane Sandy. Claiming a casualty
loss as an itemized tax deduction could mean significant tax savings for
millions of taxpayers in a federal disaster area. Losses in a federally
declared disaster area in 2012 can be claimed on either an amended 2011 return
or a 2012 return.
4. Education tax breaks extended – The American Opportunity
Credit was extended through 2017. This often overlooked credit allows eligible
taxpayers to claim up to $2,500 for each of the first four years of college for
each student. Through 2013, the Tuition and Fees Deduction provides a reduction
in taxable income of up to $4,000, and the Lifetime Learning Credit is worth up
to $2,000 per return for post-secondary degree programs. In addition, the
tuition and fees deduction, worth up to $4,000 per tax return, was extended.
5. Energy credits extended – Taxpayers may claim
energy-efficiency tax credits for the cost of eligible home improvements up to
the maximum lifetime credit of $500. Among the eligible improvements are
windows, doors and insulation.
6. Health exchanges will use returns for income verification
– The 2012 tax return may be used for income verification for open enrollment
for health insurance through government-sponsored exchanges. This process
starts in October.
"Some immediate adjustments might have to be made
because paychecks are smaller and tax refunds are coming later this year, but
taxpayers need to know there are many opportunities for them to capitalize on
existing tax breaks," Jensen said.
H&R Block's tax professionals prepare and sign their
clients' tax returns, guaranteeing accuracy and the maximum refund. In office
preparation services include Second Look® reviews and Block LiveSM, the
industry's only video solution. H&R Block At Home™ gives do-it-yourself
filers the expertise and guidance of The Tax Institute at H&R Block on
their computers, iPads and smartphones. The new My H&R Block Account lets
taxpayers upload receipts and other important tax season documents securely, to
one place, year-round, for free. The company offers affordable financial
products and services through H&R Block Bank, and keeps its offices open
and tax conversation going with clients year-round via blogs, tweets and
Facebook.
E files your Iowa
Taxes 2013 & Get Kansas
Taxes 2013
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