Key tax breaks for families will continue by extending the annual $1,000 child tax credit, $2,500 American Opportunity Credit and the Earned Income Credit.
However, beginning in January 2013, the social security tax will revert to 6.2% (instead of 4.2%) on wages and the self-employment tax will revert to 15.3% (instead of 13.3%). This means a decrease in take home pay for most taxpayers.
It's clear the 2013 tax season will be one of historical significance. Besides understanding what tax breaks one may qualify for, we also know that the 2012 tax return is a key to determining eligibility for health care benefits. Therefore it's critical for taxpayers to educate themselves about the Affordable Care Act, as well as what credits and deductions they can claim to keep more of what they earn.