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Make sure you know relevant tax law changes before filing day

| Jan 21, 2014 | Uncategorized |

As the calendar turned over a new page to 2014, many California residents began to get their financial records organized in order to file their federal and their state income tax returns. Every year it is very important to pay attention to various changes in tax law that could impact one’s income tax return. This year, there are a few federal tax changes that are very important, but that many might not be aware of yet.

For example, for the 2013 tax year the threshold for taking a deduction for medical expenses rose, so that deduction is only available to those who spent at least ten percent of their total income on medical expenses. Itemized deductions are also facing more limits, specifically for single people who make $250,000 or more or for married people filing separately who make $150,000 or more. Tax rates have also changed slightly in some cases, including an additional .09 percent tax liability for the Medicare tax for individuals who earn more than $200,000.

Of course, paying close attention to tax law changes matters most when the IRS responds to a filing with a concern about a mistake. Hearing from the IRS about a deduction that may have been incorrect or a misreported portion of income can be a nerve-wracking experience. Having the advice of someone experienced in tax law to help analyze the situation can make it easier and can alleviate some of the difficulty of trying to work out a conflict with the IRS. 

Source: US News, “6 Critical Changes to Note When Filing Your 2013 Taxes,” Teresa Mears, Jan. 21, 2014. 

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