As consumers prepare to file their 2012 tax returns, millions already have experienced the most-immediate and obvious change in 2013 levies.
A two-year Social Security payroll tax holiday ended with the new year. The rate reverted to 6.2 percent from 4.2 percent of gross income for most taxpayers, and many wage earners find their take-home pay smaller than it was in December.
Households earning $40,000 to $50,000 in annual income will pay about $579 more to Social Security this year, according to the Tax Policy Center, a nonpartisan research group in Washington, D.C.
"Two percent is a big increase," said Joseph Alu, a certified public accountant who owns a Scranton firm. "It hurts everybody."
Some tax alterations are in place for 2012 filers, but major differences are in store for 2013.
"For people filing their 2012 returns, they are not going to see many changes from what they had in 2011," said Bill Lazor, CPA, a partner at Kronick Kalada Berdy and Co., a Kingston accounting firm. "There's mostly continuations of things from 2011 that were supposed to go away."
One change favorable to Pennsylvania taxpayers in 2013 is a marginal decrease in the personal rates for unemployment compensation withholding, Mr. Lazor said.
"It's a small change, but a change nevertheless," he said.
Some federal tax provisions scheduled to sunset in 2012 have been extended, including deductions for first-time homebuyers who are required to purchase private mortgage insurance. Some business tax breaks scheduled to expire also were extended, along with a $250 deduction for teacher classroom expenses also was continued.
Filers who qualify for popular education tax credits may face some 2012 filing delays, though. The Internal Revenue Service reported last week that taxpayers who claim the American Opportunity Tax Credit or the Lifetime Learning Credit must postpone filing for several weeks, which will also stall their refunds.
About 14 million tax returns are expected to claim one of the credits for the 2012 filing year, the Tax Policy Center reported.
"It's going to be the middle of February by the time a lot of those forms are available. It's going to be a long tax season," Mr. Alu said. "There's going to be an awful lot of extensions, I believe, this year."
The tax landscape changed dramatically for the current year, though.
"The majority of significant tax impacts are going to occur in 2013," Mr. Lazor said. "You really have to plan."
Among the major changes is an increase in tax rates to 39.6 percent, from 35 percent, for individuals earning at least $400,000 and couples grossing at least $450,000.
It also increases levies on dividend and capital gains revenue for upper-income filers and imposes a Medicare surtax on dividend and capital-gain income for individuals earning at least $200,000 and couples grossing at least $250,000.
Some phaseouts of personal and dependent deductions will begin at $250,000 in income for individuals and $300,000 for married couples filing jointly. Some of those filers will lose credits for mortgage interest, charitable contributions and deductions for state and local income and property taxes.
About 70 percent of households earn $57,000 or less in annual gross income and they can file their federal taxes electronically for free, said David Stewart, a regional spokesman for the IRS. Taxpayers can go to www.IRS.gov and access the "free file" link, he said, which gives them an option of software providers.
"It's a free product and it works really well," Mr. Stewart said. "We wish more people would use it."
Contact the writer: jhaggerty@timesshamrock.com