It’s January: Time to Prepare for Tax Season

by Clayton Himstedt, CPA

Tax SeasonNow that the holidays are behind us, we can start focusing on everyone’s favorite time of year, tax time. Throughout the month of January, your 2015 tax documents will begin arriving in your mailbox. The best time to provide your tax information to your tax preparer is early February even if you don’t have every last tax document. By early February you should have collected the bulk of your tax documents and the additional time to prepare and file your tax return will benefit you and your tax preparer.   The following is a list of the typical documents you may receive and should bring to your tax preparer:
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What’s New on the Form 1040 (2013)

Tax form

Change in Tax Rates

Beginning in 2013, the American Taxpayer Relief Act of 2012 imposes new higher 39.6% and 20% tax rates on ordinary income and long-term capital gains, respectively. The new top ordinary income tax rate of 39.6% is imposed on taxable income over $400,000 for single filers, $425,000 for head-of-household filers and $450,000 for married taxpayers filing jointly ($225,000 for each married spouse filing separately). The 20% capital gain tax rate applies to capital gains and dividends for individuals above the top income tax bracket threshold.
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