Summary of 2013 Tax Changes

[Yardley CPA]

Here's an article from the Journal of Accountancy that provides a summary of some of the tax changes for 2013:

http://www.journalofaccountancy.com/Issues/2014/Jan/20138704.htm

[ILLMAS]

I attended a 2013 tax seminar this past Saturday, the presenter did some interesting example that you can try at home, he basically took a high income client from 2012 and recreated it in 2013, he did a 1040 only, Sch A, Sch C etc... and the biggest change in 2013, is AMT goes down so drastically it can even disappear on a high income earner. Of course the additional Medicare Tax goes up, what I found astonishing is that the presenter (former IRS) had no words to explain why AMT went down by so much and he did say not to hold against his examples, that according to Drake the software was up to date. At the end he said if the tax program is accurate then congress did a major boo boo with AMT. I left all my material in my car, but I do recommend doing some examples, you'll be surprised, also don't forget to compare federal withholding, you might notices it increased.

[Mr. Pencil]

the presenter (former IRS) had no words to explain why AMT went down by so much and he did say not to hold against his examples,

Did he really say "boo boo"? Man, this business gets more technical every year! No, obviously the guy is an idiot who did not bother to prepare for and rehearse his own presentation. Even he admitted it was not reliable. Get your money back.

[Guest Taxed]

I attended a 2013 tax seminar this past Saturday, the presenter did some interesting example that you can try at home, he basically took a high income client from 2012 and recreated it in 2013, he did a 1040 only, Sch A, Sch C etc... and the biggest change in 2013, is AMT goes down so drastically it can even disappear on a high income earner. Of course the additional Medicare Tax goes up, what I found astonishing is that the presenter (former IRS) had no words to explain why AMT went down by so much and he did say not to hold against his examples, that according to Drake the software was up to date. At the end he said if the tax program is accurate then congress did a major boo boo with AMT. I left all my material in my car, but I do recommend doing some examples, you'll be surprised, also don't forget to compare federal withholding, you might notices it increased.

MAS was this a Drake presentation? I am trying to find it on their training site?

[ILLMAS]

MAS was this a Drake presentation? I am trying to find it on their training site?

No it was just a general tax update, nothing to do with Drake.

[SaraEA]

You have to think back to the basics of AMT to get your head around this. Every tax return is calculated two ways, according to regular tax and again using AMT rules. The taxpayer pays the higher of the two. (If regular tax is $20k and AMT is $25k, the tax liability on the return shows as $20k on line 44 plus $5k AMT on line 45.) For 2013 tax rates have increased, certain taxpayers are subject to phasing out dependency exemptions and itemized deductions, medical deductions now match AMT rules, and then there are the new Medicare and investment income tax surcharges. Thus regular tax rates are going up, so the difference between regular and AMT is no longer as great. In the above example, regular tax is now $23k so AMT is only $2k. Bottom line is still the same.