Form 1040 Tax Year 2013: Complete Filing Checklist
2013 Tax Year Unique Attributes
The 2013 Form 1040 marks a significant milestone in federal income tax administration as it is the first year implementing two new individual income taxes established under the Affordable Care Act. The Additional Medicare Tax of 0.9% applies to Medicare wages, railroad retirement compensation, and self-employment income exceeding specific thresholds based on filing status. The Net Investment Income Tax, at 3.8%, applies to net investment income when modified adjusted gross income exceeds the designated thresholds.
For 2013, capital gains tax rates increased to a maximum of 20% for higher-income filers, up from the previous 15% maximum rate that applied in prior years. This rate increase affects taxpayers in the highest income brackets who realize long-term capital gains or receive qualified dividend income.
A special above-the-line charitable deduction provision allows taxpayers to deduct cash contributions for Typhoon Haiyan relief efforts in the Philippines. Contributions made after March 25, 2014, and before April 15, 2014, may be treated as if made on December 31, 2013, and deducted on the 2013 tax return if contributed to a qualified organization.
Year-Specific Programs Applicable to Form 1040 (2013)
Additional Medicare Tax
The Additional Medicare Tax of 0.9% applies to the combination of Medicare wages, railroad retirement compensation, and self-employment income that exceeds threshold amounts. The thresholds are $200,000 for single filers, $250,000 for married filing jointly, and $125,000 for married filing separately. Employers must withhold Additional Medicare Tax on wages exceeding $200,000 regardless of the employee’s filing status. Taxpayers calculate and report this tax using Form 8959.
Net Investment Income Tax
The Net Investment Income Tax of 3.8% applies to the lesser of net investment income or the amount by which modified adjusted gross income exceeds $200,000 for single filers, $250,000 for married filing jointly, or $125,000 for married filing separately. Net investment income includes interest, dividends, capital gains, rental and royalty income, and passive business income. Taxpayers calculate and report this tax using Form 8960.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
Ten-Step Form 1040 (2013) Paper-Filing Checklist
Step 1: Verify Filing Status and Dependent Information
Select your filing status by checking one box: single, married filing jointly, married filing separately, head of household, or qualifying widow(er). Enter your personal information, including name, address, and Social Security number. List all qualifying dependents on page 1, providing their names, Social Security numbers, and relationship to you.
The personal exemption amount for 2013 is $3,900 per exemption, including yourself, your spouse if filing jointly, and each qualifying dependent. This exemption amount begins to phase out if your adjusted gross income exceeds certain thresholds: $150,000 for married filing separately, $250,000 for single filers, $275,000 for head of household, and $300,000 for married filing jointly or qualifying widow(er).
Step 2: Gather All Required Income Documents
Collect all income documentation before beginning your return. Obtain Form W-2 from each employer, which should show wages, salaries, tips, and other forms of compensation. Gather Forms 1099-INT and 1099-OID, which show interest income from banks, brokerages, and other financial institutions. Collect Forms 1099-DIV showing dividend income from investments.
Obtain Form 1099-B showing proceeds from broker transactions and capital gains or losses from securities sales. Collect Form 1099-S if you sold real estate during 2013. Gather Schedule K-1 forms from any partnerships, S corporations, estates, or trusts in which you have an ownership interest. Collect any other income statements, including Forms 1099-MISC for miscellaneous income, 1099-G for unemployment compensation or state tax refunds, and 1099-R for distributions from retirement accounts.
Step 3: Report Business Income and Calculate Self-Employment Tax
If you operated a sole proprietorship or other business during 2013, complete Schedule C (Profit or Loss from Business) or Schedule C-EZ if you qualify for the simplified version. Report your gross receipts, deductible business expenses, and net profit or loss. Enter the net profit or loss from Schedule C or C-EZ on Form 1040, line 12.
If your net earnings from self-employment are at least $400, you must file Schedule SE (Self-Employment Tax) to calculate Social Security and Medicare taxes on your self-employment income. The self-employment tax rate for 2013 is 15.3% on net earnings up to the Social Security wage base, consisting of 12.4% for Social Security and 2.9% for Medicare. Enter the self-employment tax amount on Form 1040, line 56, and enter one-half of the self-employment tax as an adjustment to income on line 27.
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
Step 4: Report Capital Gains and Losses
Report all sales of stocks, bonds, mutual funds, real estate, and other capital assets on Schedule D (Capital Gains and Losses). For most transactions, you must also complete Form 8949 (Sales and Other Dispositions of Capital Assets) to provide detailed information about each transaction before summarizing on Schedule D.
Separate your transactions into short-term capital gains and losses for assets held for one year or less, and long-term capital gains and losses for assets held for more than one year.
Long-term capital gains are taxed at preferential rates of 0%, 15%, or 20% depending on your 2013 taxable income bracket and filing status. The 20% rate applies to taxpayers in the highest income tax bracket.
Capital losses are first used to offset capital gains. If capital losses exceed capital gains, you may deduct up to $3,000 of net capital loss against ordinary income, or $1,500 if married filing separately. Any excess capital loss carries forward indefinitely to future tax years.
Step 5: Choose Standard or Itemized Deduction
Determine whether to claim the standard deduction or itemize deductions on Schedule A. For 2013, the standard deduction amounts are $6,100 for single filers or married individuals filing separately, $12,200 for married individuals filing jointly or as a qualifying widow(er), and $8,950 for heads of household. If you are age 65 or older or blind, you may claim an additional standard deduction amount.
If your itemized deductions exceed your standard deduction amount, complete Schedule A and attach it to your return. Itemized deductions include medical and dental expenses exceeding 10% of your adjusted gross income (or 7.5% if you or your spouse was born before January 2, 1949), state and local income taxes or sales taxes, real estate taxes, home mortgage interest, charitable contributions, and certain miscellaneous deductions.
A special provision applies for 2013: cash contributions for Typhoon Hainan relief efforts in the Philippines made after March 25, 2014, and before April 15, 2014, may be treated as if made on December 31, 2013, allowing the deduction on your 2013 return if you itemize deductions and the contribution meets all other requirements for charitable deductions.
Step 6: Calculate Additional Medicare Tax Using Form 8959
If your Medicare wages, railroad retirement compensation, or self-employment income exceed the threshold amounts for your filing status, complete Form 8959 to calculate Additional Medicare Tax. The thresholds are $200,000 for single filers, $250,000 for married filing jointly, and $125,000 for married filing separately.
Your employer withholds an additional Medicare tax on wages exceeding $200,000, regardless of your filing status. You may need to make estimated tax payments or request additional withholding if you anticipate owing additional Medicare tax. Enter the total Additional Medicare Tax from Form 8959 on Form 1040, line 60, checking the box for Form 8959.
Step 7: Calculate Net Investment Income Tax Using Form 8960
If you have net investment income and your modified adjusted gross income exceeds the threshold for your filing status, complete Form 8960 to calculate the Net Investment Income Tax. The thresholds are $200,000 for single filers, $250,000 for married filing jointly, and $125,000 for married filing separately.
Net investment income includes taxable interest, dividends, capital gains, rental and royalty income, and income from passive business activities. The tax equals 3.8% of the lesser of your net investment income or the amount by which your modified adjusted gross income exceeds the threshold. Enter the Net Investment Income Tax from Form 8960 on Form 1040, line 60, checking the box for Form 8960.
Step 8: Calculate Personal Exemptions
Complete line 6 to calculate the number of exemptions you are claiming. On line 6a, check the box if you can claim yourself as an exemption. On line 6b, check the box for your spouse if filing jointly. On line 6c, enter the number of your qualifying dependents. Line 6d shows the total number of exemptions.
Multiply the number on line 6d by $3,900 to calculate your total exemption amount for line 42. However, if your adjusted gross income on line 38 exceeds the threshold for your filing status, your exemption amount is subject to phaseout. The phaseout begins at $150,000 for married filing separately, $250,000 for single filers, $275,000 for head of household, and $300,000 for married filing jointly or qualifying widow(er). Consult the exemption phaseout worksheet in the Form 1040 instructions if your income exceeds these amounts.
Step 9: Calculate Total Income, Adjusted Gross Income, and Taxable Income
Complete all income lines on Form 1040, including wages on line 7, taxable interest on line 8a, dividends on lines 9a and 9b, capital gains or losses on line 13, retirement distributions on lines 15a through 16b, and all other income sources. Add all income amounts to calculate total income on line 22.
Enter adjustments to income on lines 23 through 35, including educator expenses, certain business expenses, health savings account deductions, moving costs, self-employment tax deduction, self-employed health insurance deduction, IRA deduction, student loan interest deduction, and tuition and fees deduction. Subtract total adjustments from total income to calculate adjusted gross income on line 37.
Subtract your standard deduction or itemized deductions and your exemption amount from adjusted gross income to calculate taxable income on line 43. Use the tax tables or tax computation worksheet to determine your tax on line 44. Add any additional taxes from lines 45 through 60, including self-employment tax, household employment taxes, Additional Medicare Tax, and Net Investment Income Tax. Subtract credits from lines 47 through 53 to calculate total tax on line 61.
Step 10: Calculate Payments, Refund or Amount Owed, and File Return
Enter all tax payments on lines 62 through 71, including federal income tax withheld from Forms W-2 and 1099, estimated tax payments, earned income credit, additional child tax credit, and other refundable credits. Add all payments to calculate total payments on line 72.
If your total payments on line 72 exceed your total tax on line 61, you have an overpayment on line 73. You may choose to have the overpayment refunded on line 74a or applied to your 2014 estimated tax on line 75. If your total tax exceeds your total payments, you owe additional tax on line 76.
Sign and date the return on the signature lines. If filing jointly, both you and your spouse must sign. Attach all required schedules and forms in sequence order, including copies of all Forms W-2, Schedules A through F, Schedule SE, and Forms 8814, 8959, and 8960 if applicable.
Mail your completed return to the IRS address listed in the Form 1040 instructions for your state, along with any enclosed payment. The filing deadline is April 15, 2014, or the next business day if April 15 falls on a Saturday, Sunday, or legal holiday. If you need more time to file, request an automatic six-month extension by filing Form 4868 by April 15, 2014, though any tax owed is still due by the original deadline.
Key Form Changes for 2013
The tax calculation instructions for line 44 were updated to reflect the new 20% maximum capital gains tax rate for 2013, which is an increase from the 15% maximum rate that applied in prior years. This higher rate applies to taxpayers in the highest income tax bracket.
Line 60 includes new checkboxes for Form 8959 (Additional Medicare Tax) and Form 8960 (Net Investment Income Tax) to reflect the two new taxes that took effect on January 1, 2013. These taxes did not exist in prior tax years and represent significant additions to the federal income tax system for higher-income taxpayers.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
