The Internal Revenue Service announced annual inflation adjustments for tax year 2013, including the tax rate schedules, and other tax changes from the recently passed American Taxpayer Relief Act of 2012.
The tax items for 2013 of greatest interest to most taxpayers include the following changes.
- Beginning in tax year 2013 (generally for tax returns
filed in 2014), a new tax rate of 39.6 percent has been added for
individuals whose income exceeds $400,000 ($450,000 for married taxpayers
filing a joint return). The other marginal rates — 10, 15, 25, 28, 33 and
35 percent — remain the same as in prior years. The guidance contains the
taxable income thresholds for each of the marginal rates.
- The standard deduction rises to $6,100 ($12,200 for
married couples filing jointly), up from $5,950 ($11,900 for married couples
filing jointly) for tax year 2012.
- The American Taxpayer Relief Act of 2012 added a
limitation for itemized deductions claimed on 2013 returns of individuals
with incomes of $250,000 or more ($300,000 for married couples filing
jointly).
- The personal exemption rises to $3,900, up from the
2012 exemption of $3,800. However beginning in 2013, the exemption is
subject to a phase-out that begins with adjusted gross incomes of $150,000
($300,000 for married couples filing jointly). It phases out completely at
$211,250 ($422,500 for married couples filing jointly.)
- The Alternative Minimum Tax exemption amount for tax
year 2013 is $51,900 ($80,800, for married couples filing jointly), set by
the American Taxpayer Relief Act of 2012, which indexes future amounts for
inflation. The 2012 exemption amount was $50,600 ($78,750 for married
couples filing jointly).
- The maximum Earned Income Credit amount is $6,044 for
taxpayers filing jointly who have 3 or more qualifying children, up from a
total of $5,891 for tax year 2012.
- Estates of decedents who die during 2013 have a basic
exclusion amount of $5,250,000, up from a total of $5,120,000 for estates
of decedents who died in 2012.
- For tax year 2013, the monthly limitation regarding the
aggregate fringe benefit exclusion amount for transit passes and
transportation in a commuter highway vehicle is $245, up from $240 for tax
year 2012 (the legislation provided a retroactive increase from the $125
limit that had been in place).
Questions? As always, we are here to help! Give us a call today.
Security Tax Services LLC
North Sound South Sound
2802 Wetmore Ave, Suite 212 33530 1st Way S, Suite 102
Everett, WA 98201 Federal Way, WA 98003
425.339.2400 253.237.0751
fax 425.259.1099 fax 253.237.0701
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