Payroll Tax Cut The 2% payroll tax cut has expired which explains why many people's pay checks have more tax taken out.
Deductible: Phase out for married filing jointly $181K to $191K if you are not covered by a retirement plan at work. Phase out for married filing jointly $96K to $116K if covered by a retirement plan at work. Single persons have no phase out if not covered by a retirment plan at work. Single persons phase out from $60K to $70K if covered by a retirement plan at work.
Contribution Limits: $5,500 a year per person under 50 years old. $6,500 a year per person 50 years or older.
ROTH: Full contribution up to $181K married filing jointly and $114K for single filers. Phase out $181K to $191K for married filing jointly and $114K to $129K for single filers and heads of household.
401(k) Contribution Limits: The elective deferral (contribution) limit is $17,500.
Foreign Financial Assets If you have more than $50,000 in a depository or custodial account at foreign financial institution, stocks or securities issued by foreign persons or any other financial instrument or contract held for investment issued by a non US person or any interest in a foreign entity, it must be reported. Failure to report results in penalties up to $50,000!
Mortgage PMI Deduction Mortgage Insurance Premiums - currently extended through 2014 as an itemized deduction.
Adoption Tax Credits Maximum credit is $12,970 and unused credits can be carried forward up to five tax years. Additional information can be found at: http://www.irs.gov/taxtopics/tc607.html
Standard Mileage Rate
56 cents per mile for business, 23.5 cents for medical and moving. Charity remains at 14 cents.
Social Security Maximum earnings subject to OASDI (6.2% portion) is $118,500. Employees continue to get a 2% reduction in OASDI taxes they pay making it 4.2%. Potential savings can be as high as $2,370!
Estate Tax The top estate, gift, and generation-skipping transfer rate is 40%.
Energy Tax Credits Energy Home Improvements credits are deductible for 2014. Qualified home energy efficient improvements including windows, insulation, doors certain roof improvements are eligible. Maximum tax credit is $500 total for the taxpayer's lifetime. Only $200 of this limit can be used for windows.
Education Credits American Opportunity Credit is available and provides $1,500 in non-refundable credits (credit against other income taxes) and $1,000 refundable tax credit even if your income tax is zero. Lifetime Learning Credit is available; phase out for married filing jointly $160K. Single persons and head of household phase out at $80K.
Long Term Care Premiums Long term care services and premiums paid for qualified long term care insurance contracts are deductible medical expenses.
State Income Tax Rates
New York: New York state tax rates are lower for 2012 than they were in 2011. The greatest reduction for individuals comes to those making between $500,001 and $1M, and the greatest reduction for those whom are married filing jointly comes to those making between $500,001 and $2M.
California: Most have remained the same, but the maximum rate for individuals was raised to 12.3% from 9.3%.
Metropolitan Commuter Transportation Mobility Tax (MCTMT)
Please click on the links below to learn more about the MCTMT:
For self-employed individuals:
STATE TAX UPDATE (7/23/13)
Governor Cuomo Announces Estate Tax Refunds Available to Qualified Spouses of Same-Sex Couples