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Even those who are retired have concerns about the amount of income taxes they are required to pay. So being it is now “tax” season some tax saving information may be helpful.

Once total or gross income from all sources has been determined, certain adjustments to income are available.  These adjustments amount to a reduction in gross income and generally are granted to achieve tax fairness or in recognition of a desirable social objective. Adjustments to income are available regardless of whether a taxpayer itemizes deductions or takes the standard deduction.

Tax season is a good time to check your Social Security Statement Online

The available adjustments to income include:

One-Half of Self-Employment Tax

Self-employed taxpayers generally deduct one-half of their self-employment tax, as determined on Schedule SE.

Self-Employed Health Insurance Deduction

Self-employed taxpayers can deduct 100 percent of the health insurance premiums (including long-term care insurance premiums) they pay for themselves, their spouses and dependents.

Health Savings Account Deduction

Contributions to a Health Savings Account, up to specified maximums, may be deducted.

IRA Contributions

Eligible individuals can contribute and deduct up to $5,500 to an IRA; $10,000 for an eligible married couple, even if one spouse has no earned income. For workers age 50 and older, the IRA contribution limit is $6,500 for 2013.

Education Savings Account Contributions

Subject to income limitations, up to $2,000 per beneficiary (generally a child under age 18) per year may be contributed to an Education Savings Account and deducted; subject to income limitations.

Student Loan Interest Deduction

Up to $2,500 of the interest paid in 2013 on a loan for qualified higher education expenses may be deducted, subject to income limitations.

Qualified Tuition and Related Expenses Deduction

Up to $4,000 of qualified tuition and related expenses paid in 2013 may be deducted, subject to income limitations.

Educator Expenses

Professional educators can deduct up to $250 spent out-of-pocket for classroom expenses.

For help you may ask questions in the comments

Or contact me privately here: Tim Barton Chartered Financial Consultant

 

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2 Responses to What Adjustments to 2013 Gross Income Are Available?

  1. Ryan on February 14, 2013 at 12:54 pm

    Is there any way to find authoritative guidance from the IRS that certain deductions, specifically the self-employed insurance deduction, will remain available for 2013 since they don’t release the 1040 forms for the better part of another year?

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