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Certified Public Accountants are always looking ahead to get the latest news or updates to IRS laws, forms or tax rates. While most CPAs are still working on 2012 extended tax returns, they are also watching for any news on the upcoming 2013 tax year. There are some changes and additions to tax rates for the 2013 tax year. These changes will not affect the majority of people as they concern tax rates for a new top tax bracket. For those who plan to estimate their income tax, the following tax rates will be used by Certified Public Accountants for tax planning purposes. The percentages show the taxable income for applicable earnings in 2013. Filing Single 10% on $0 to $8,925 15% on $8,925 to $36,250 25% on $36,250 to $87,850 28% on $87,850 to $183,250 33% on $183,250 to $398,350 35% on $398,350 to $400,000 39.6% over $400,000 Married Filing Jointly or Qualifying Widow(er) 10% on $0 to $17,850 15% on $17,850 to $72,500 25% on $72,500 to $146,400 28% on $146,400 to $223,050 33% on $223,050 to $398,350 35% on$398,350 to $450,000 39.6% over $450,000. Married Filing Separately 10% on $0 to $8,925 15% on $8,925 to $36,250 25% on $36,250 to $73,200 28% on $73,200 to $111,525 33% on $111,525 to $199,175 35% on $199,175 to $225,000 39.6% over $225,000 Head of Household 10% on $0 to $12,750 15% on $12,750 to $48,600 25% on $48,600 to $125,450 28% on $125,450 to $203,150 33% on $203,150 to $398,350 35% on $398,350 to $425,000 39.6% over $425,000. Knowing these rates will help CPAs and their clients estimate their owed tax. For those who owe taxes, knowing these figures will help to organize their finances now and begin saving towards the IRS payment. If you receive extra income, that income will be taxed at the same rate until the the taxpayer reached the next tax bracket. Your Certified Public Accountant can use this information to help you figure out how much tax you could save by increasing or decreasing your deductions. If you fall in the 28% bracket, you could save 28 cents for each dollar spent towards a tax-deductible expense. Your mortgage interest or charitable contribution would decrease federal tax accordingly. Decreasing deductions would help if your marginal tax rate interacts with other tax rates such as alternative minimum tax, Social Security tax, and Medicare. Since the alternative tax could push a person into the next tax bracket or eliminate any tax savings from deductions, it is important to calculate these estimated costs. Certain types of income may be taxed at different rates. Check with your tax specialist or CPA about possible capital gains tax rates. These rates apply towards long-term investments, collectible, dividends and certain types of real estate. If you are going to be smart about limiting tax liabilities, then tax season will last all year. Work with your Certified Public Accountant to minimize tax liabilities throughout the year. With proper planning, there are many ways you can make these liabilities affordable or at least manageable. Having a CPA on your side will help your overall finances not just filing taxes. Experience professionals will help you develop a financial plan. Create plans for a child's college education, your retirement, investments and keep your finances on track for the upcoming tax season. A Certified Public Accountant will have up to date IRS information so your plan can adjust as needed throughout the year. CDRCPA Inc. Certified Public Accountants is conveniently located in Murrieta, California, but our entire staff of accountants, CPA's and personal or business tax service professionals frequently visit our client's at their location. So, if you can't come to us, we'll certainly come to you.
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