Popular tax breaks scheduled to disappear at the end of 2014

It is the time of year when most people begin preparing their tax returns and searching for possible breaks and credits. Although there were minimal changes to the tax code in 2013, there were some important changes that may affect how certain individuals file their returns and pay their taxes this season.

Those who are likely to see the biggest changes are individuals with particularly high incomes. First, there has been an increase in the tax rate for those who earn more than $400,000 each year. For the 2012 tax year, the rate was 35 percent and it rose to 39.6 percent for the 2013 tax year. Second, these same individuals will also see an increase in the maximum capital gains rate. In previous years, it was 15 percent, but it rose to 20 percent for the 2013 tax year. In many cases, these increases could impact people's tax bills in ways they were not expecting, which is likely to lead to debate over tax issues in Congress throughout this year.

The biggest changes affecting those outside of the top tax bracket relate to the deduction of certain medical expenses. In past years, taxpayers were allowed to deduct medical payments that totaled 7.5 percent or more of their total income. For the 2013 tax year, the threshold rose to 10 percent. This means that far fewer people are likely to be able to deduct their medical costs.

One other significant change for the 2013 tax year relates to the federal recognition of same-sex marriages. Same-sex couples must now choose to file either as married filing jointly or married filing separately. This is the case even for couples who live in states that do not recognize same-sex marriages.

Fortunately, few significant tax deductions disappeared in the 2013 tax year. This is, however, the final year that taxpayers can receive a break for home improvements designed to improve energy efficiency or for classroom supplies purchased by teachers.

In some circumstances, changes in the tax code can catch taxpayers off guard. When that occurs, taxpayers may find themselves in situations where they have not paid their entire tax bill. If you find yourself in a dispute with the Internal Revenue Service over unpaid taxes, it is important to speak to an experienced tax attorney. An experienced tax lawyer knows how to deal with the IRS and can defend your rights aggressively. For more information, contact a tax attorney today.