2013 Tax Planning: 5 Reasons to Start Now

BlumShapiro offers five good reasons to begin planning now.

It may feel like you’ve just closed the book on the 2012 tax season and planning for 2013 is far off, but the time for you and your clients to start tax planning for 2013 is now. Tax and accounting firm BlumShapiro offers five good reasons to get an early start.

Image: Fotolia

1. The 2013 Tax Season Is Closer than You Think 1. The 2013 Tax Season Is Closer than You Think

Industry experts generally agree that proper tax planning takes an average of six months – the time it often takes experts to educate themselves on all available opportunities, determine the best approach, and implement the plan. When you consider that six months from today puts us in March 2013, suddenly next year’s tax season doesn’t seem so far away. If you really want to get the best tax outcomes in 2013: the time to start planning is now.

Image: Shutterstock

2. Uncertainty Looms Over Next Year’s Tax Climate 2. Uncertainty Looms Over Next Year’s Tax Climate

Next year’s tax climate can be best characterized by its extreme uncertainty, which will be brought on by changes resulting from the Supreme Court upholding the Affordable Care Act, as well as by a number of provisions in the Bush tax cuts that are set to expire. This level of uncertainty will make early 2013 a chaotic time for tax planning, and it makes now an even more important time to get the planning process started.

Image: Shutterstock

3. You Could Still Benefit from Generous Tax Breaks that May Be Gone Next Year 3. You Could Still Benefit from Generous Tax Breaks that May Be Gone Next Year

With many provisions of the Bush tax cuts set to expire at year end, starting your 2013 tax planning now means you’ll still have a chance to take advantage of some breaks that may be history by year end. Rates are set to increase on federal income taxes (from 36 percent to 39.6 percent), long-term capital gains (from a maximum tax rate of 15 percent to 20 percent), and dividends (to be taxed as ordinary income). Waiting too long to plan for 2013 may cause you to miss out on some of these tax breaks for good.

Image: Fotolia

4. The Estate Tax Is Set to Increase 4. The Estate Tax Is Set to Increase

Significant changes are also set to take place when it comes to the estate tax. This tax is set to increase from 35 percent this year to 45 percent next, and the lifetime exemption amount will go down from $5.12 million to $1 million – unless Congressional action is taken. These changes are likely to impact your plans for 2013, and they make it even more critical that you start the planning process immediately.

Image: Fotolia

5. The Alternative Minimum Tax Will Greatly Expand its Reach 5. The Alternative Minimum Tax Will Greatly Expand its Reach

Another large tax provision certain to have an impact on many individuals is the higher Alternative Tax Exemption, or AMT patch. This exemption is set to drop from $74,450 this tax year to $45,000 next year. This means that not only will many more people have to pay the AMT patch, but the increase in taxable income will result in even more taxes that individuals pay next year. AMT may not have applied to you in the past, but this year, it may be one of many reasons for you to plan carefully for 2013.

“Regardless of what happens in Congress between now and the end of the year, people can still ensure economic stability for themselves and their future,” said Andrew Lattimer, a partner at BlumShapiro. “But the key is starting now by consulting your tax professionals while there is time to plan without being caught up in what is certain to be a chaotic early 2013."

Image: Fotolia



Top 10 Productivity Tools for Accountants

Leaders in the field pick their favorite efficiency-enhancers

View the slideshow >>


ACA Pitfalls for 2016

7 questions to help protect your business clients

View the slideshow >>


Xero Recognizes Outstanding Partners at Xerocon 2016

Every year, Xero recognizes app, bookkeeping and accounting partners that have performed well the previous year. These are the 2016 award winners.

View the slideshow >>


The HR Helpline

Consultants Tamera Loerzel and Jennifer Wilson of ConvergenceCoaching answer tough HR questions.

View the slideshow >>


Back-to-School Tax Tips

With the start of school just around the corner, taxpayers should be aware of the following tax breaks and deductions available for qualifying expenses, according to the audit defense service TaxAudit.com.

View the slideshow >>


Tax Tips for Newlyweds

Once they stop being Bride- and Groomzillas, new couples need tax advice

View the slideshow >>


Summer Tax Tips for Your Clients and Their Children

Summer is well underway, and now is a great time to help your clients and their dependents with the tax tips in this slideshow written by Michael Sonnenblick of Thomson Reuters Checkpoint.

View the slideshow >>


Tax Savings from a Home Office

Tips on how to make working at home pay, from the Illinois CPA Society

View the slideshow >>


10 Tips on Amending a Tax Return

The IRS shares some advice on fixing a return

View the slideshow >>


CPAs and Tax Pros Gone Wrong

Some of our favorite examples of professionals breaking bad

View the slideshow >>



Subscribe to the Tax Pro Today newsletter