By year's end, Americans usually have a good idea of what the tax rules will look like in the new year and can plan accordingly. That's not the case this time around. With a huge chunk of the tax code set to expire Jan. 1, the 2013 tax forecast is, well, foggy.
With a bumper crop of tax code changes, extensions and expirations, filing your return may be tricky. Here's what you need to know.
- The health insurance penalty If you didn't have health insurance in 2015 you will pay $325 per person or 2% of your household income, whichever is greater.
- Pell grants Pell grants may be allocated as living expenses, potentially increasing the education credit
- Deductions are increasing The standard deduction goes up to $6,300 for singles and $12.600 for married filing jointly
- The Alternative Minimum Tax Is Increasing The Alternative Minimum Tax exemption amount is now $53,600 for individuals and $83,400 for joint filers.
- Higher Limits on 401(k) deductions The limit on employee contributions to a 401(k) plan will increase by $500 and is now $18,000. The "catch-up" allowance for those over 50 is also up $500 to $6,000.
- Many expired tax breaks were extended These include the higher education tuition deduction, energy credits, and commuter tax breaks, among others.
- Government payments for health care to relatives If you are paid by the government to provide non-skilled medical support services to a relative in your home, this can be excluded from taxable income.
- Tax brackets are adjusted for inflation The lowest bracket will go from $18,150 to $18,450, all other brackets are being adjusted too.
