Tax filing tips and what you should know
Some highlights of tax-filing season.
The Associated Press
More than 90 percent of taxpayers go to a tax preparer or use tax software to file their returns, estimated Jim Buttonow, a 20-year IRS veteran who is now vice president of products for New River Innovation, a tax-technology company.
• Last year, the agency received 137 million returns.
• Electronic filing increased by 6.2 percent to 113 million in 2012, an upward trend that tax experts expect to continue.
• Nearly 104 million people received refunds last year totaling about $283 billion. The average refund was $2,707, slightly less than the year before, the IRS said.
• The standard deduction has been adjusted higher for inflation, to $11,900 for married couples filing jointly, $8,700 for heads of households and $5,950 for singles. About two-thirds of taxpayers claim the standard deduction, said Barbara Weltman, an author of J.K. Lasser’s Tax Guide 2013.
• Each personal exemption is worth $3,800 for 2012, up from $3,700 in 2011.
• There also are higher mileage-rate deductions — 55.5 cents per mile if you use your car for business, 23 cents per mile for moving or medical issues and 14 cents a mile for charity.
• Capital-gains rates are unchanged from 2011 — a maximum of 15 percent for assets held more than a year.
• You can contribute up to $5,000 to a traditional individual retirement account — $6,000 for people age 50 and older — and reduce income by that amount. If you haven’t made a contribution yet, there’s still time. You have until April 15, the tax-filing deadline.
• The alternative-minimum-tax exemption is $50,600 for unmarried individuals and $78,750 for joint filers.
• The American Opportunity Tax Credit can be worth as much as $2,500 for college tuition. The credit, which can be claimed for each of the first four years of college, was extended through 2017.
• Taxpayers will have the choice of deducting state and local sales taxes instead of state and local income taxes. This is especially important to residents of states such as Washington, which doesn’t have an income tax.