2013 Gross Income Adjustments

What Adjustments to 2013 Gross Income Are Available?

Byline: Edsel Brown, Jr.

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.
The available adjustments to income include:
Educator Expenses
Professional educators can deduct up to $250 spent out-of-pocket for classroom expenses.
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.
Health Savings Account Deduction
Contributions to a Health Savings Account, up to specified maximums, may be deducted.
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.