Global Watch
International Assignment Services

United States: Summary of key 2012
and 2013 federal tax rates and limits
J...
Global Watch

Tax on net investment income

2012

2013

Single

-

Single

$200,000

MFJ

-

MFJ

$250,000

MFS

-

MFS

$...
Global Watch

Itemized deductions

2012

2013

Single

-

Single

$250,000

MFJ

-

MFJ

$300,000

MFS

-

MFS

$150,000

...
Global Watch

Alternative minimum tax

2012

2013

Single

$50,600

Single

$51,900

MFJ

$78,750

MFJ

$80,800

MFS

$39,...
Global Watch

Supplemental withholding flat rates

2012

2013

Supplemental wages up to $1,000,000 (optional):

25%

25%

...
Global Watch

71,350
108,725

13,867.50

108,725
194,175

14,228.75

28.0%

33.0%

111,525

199,175

24,959.75

33.0%

35....
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United States: Summary of key 2012 and 2013 federal tax rates and limits

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Do you know what the key individual US tax rates and applicable limits are for 2012–2013? Find out how changes apply to FICA, Medicare and capital gains tax in our summary.

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United States: Summary of key 2012 and 2013 federal tax rates and limits

  1. 1. Global Watch International Assignment Services United States: Summary of key 2012 and 2013 federal tax rates and limits January 18, 2013 In brief PwC is pleased to provide you a high-level summary of some key individual tax rates and applicable limits for 2012 and 2013. For purposes of this Global Watch, the reference to '$' means US dollars. Further: MFJ means married filing jointly MFS means married filing separately HOH means head of household. Please see our Global Watch dated January 11, 2013 for additional background. In detail FICA taxes 2012 2013 Social Security (SS) wage base: $110,100 $113,700 SS maximum - 6.2%: $4,624.20* $7,049.40** Medicare - 1.45%: No ceiling No ceiling*** * For 2012, the employee tax rate for social security was 4.2% (employer tax rate remained unchanged at 6.2%). ** The temporary two-percent employee payroll tax reduction for 2012 expired on December 31, 2012 and was not extended to 2013. Therefore for 2013, the employee tax rate for social security reverted back to 6.2%. *** See below, under 'Additional Medicare tax', for details on an increase in the Medicare tax that applies to wages and other compensation only in excess of an applicable threshold amount. www.pwc.com
  2. 2. Global Watch Tax on net investment income 2012 2013 Single - Single $200,000 MFJ - MFJ $250,000 MFS - MFS $125,000 HOH For taxable years beginning after December 31, 2012, a 3.8% tax is imposed on the lesser of net investment income or the excess of MAGI* over the following threshold amounts: - HOH $200,000 *Modified adjusted gross income. The Unearned Income Medicare Contribution, otherwise known as the net investment income tax (NIIT), was imposed under the Patient Protection and Affordable Care Act of 2010. Additional Medicare tax 2012 2013 Single - Single $200,000 MFJ - MFJ $250,000 MFS - MFS $125,000 HOH For taxable years beginning after December 31, 2012, a 0.9% tax is imposed on individual wages and other compensation in excess of the following threshold amounts: - HOH $200,000 The tax was imposed under the Patient Protection and Affordable Care Act of 2010. Personal exemption (PE) 2012 2013 Personal exemption: $3,800 $3,900 PE phase-out 2012 2013 Single Single $250,000 MFJ - MFJ $300,000 MFS - MFS $150,000 HOH The phase-out of personal exemptions begins when adjusted gross income (AGI) reaches: - - HOH $275,000 For 2012, the phase-out of personal exemptions did not apply and therefore, there were no limitations for the deductible amount of personal exemptions. For 2013, the phase-out of personal exemption ends at $372,500 for single individuals, $422,500 for married persons filing jointly, $397,500 for heads of households, and $211,250 for married individuals filing separate returns. Standard deduction 2012 2013 $5,950 Single $6,100 $11,900 MFJ $12,200 MFS $5,950 MFS $6,100 HOH 2 Single MFJ Standard deduction: $8,700 HOH $8,950 pwc
  3. 3. Global Watch Itemized deductions 2012 2013 Single - Single $250,000 MFJ - MFJ $300,000 MFS - MFS $150,000 HOH The reduction of itemized (not standard) deductions by 3% of AGI in excess of the following amounts*: - HOH $275,000 *A taxpayer may not lose more than 80% of his or her deductions as a result of the reduction in the itemized deduction amounts. For 2012, the overall limitation on itemized deductions did not apply. Standard mileage rates 2012 2013 business $0.555 business $0.565 charitable $0.14 charitable $0.14 medical & moving Standard mileage rates: $0.23 medical & moving $0.24 Section 911 2012 2013 Annual exclusion: $95,100 $97,600 Base housing amount: $15,216 $15,616 Standard qualified housing expense limit: $28,530 $29,280 Expatriation to avoid tax 2012 2013 5-year average annual net income tax in excess of the following amount: $151,000 $155,000 Amount includible in gross income of covered expatriate is reduced by*: $651,000 $668,000 *but not below zero Gift tax limits 2012 2013 Annual exclusion from total amount of taxable gifts*: $13,000 $14,000 Annual exclusion for gifts to non-US citizen spouses*: $139,000 $143,000 *This amount is per donor and per donee and refers to gifts that are not future interests in property. 3 pwc
  4. 4. Global Watch Alternative minimum tax 2012 2013 Single $50,600 Single $51,900 MFJ $78,750 MFJ $80,800 MFS $39,375 MFS $40,400 HOH Alternative minimum tax exemption amounts (subject to phase-out described in the table below)*: $50,600 HOH $51,900 *The 2012 and 2013 AMT exemption amounts were set by the American Taxpayer Relief Act of 2012, which also indexes future amounts for inflation. Alternative minimum tax phase-out 2012 2013 Single Capital gains tax Long term: Lower income taxpayers: Short term: Single $115,400 MFJ $150,000 MFJ $153,900 MFS $75,000 MFS $76,950 HOH The phase-out of the AMT exemption amount begins when the alternative minimum taxable income exceeds the following amounts: $112,500 $112,500 HOH $115,400 2012 15% 2013 20%** 0% 0% Ordinary rates Ordinary rates **The 20% capital gains rate applies only if a taxpayer's income tax rate falls in the 39.6% bracket. All other taxpayers continue to be subject to a maximum 15% capital gains rate. A 0% capital gains rate applies to taxpayers who are subject to income tax rates of 15% or less. Qualified dividends Qualified dividend rate: 2012 2013 15% 20%** **The 20% dividend rate applies only if a taxpayer's income tax rate falls in the 39.6% bracket. All other taxpayers continue to be subject to a maximum 15% dividend rate. A 0% dividend rate applies to taxpayers who are subject to income tax rates of 15% or less. Child tax credit Child tax credit: 2012 2013 $1,000 $1,000 The child tax credit is subject to phase-out for individuals with income over certain threshold amounts. 4 pwc
  5. 5. Global Watch Supplemental withholding flat rates 2012 2013 Supplemental wages up to $1,000,000 (optional): 25% 25% Supplemental wages greater than $1,000,000 (mandatory): 35% 39.6% Federal income tax rates* Married filing jointly & surviving spouses - 2012 Married filing jointly & surviving spouses - 2013 Over Not over Tax % on excess Over Not over Tax % on excess 0 17,400 0.00 10.0% 0 17,850 0.00 10.0% 17,400 70,700 1,740.00 15.0% 17,850 72,500 1,785.00 15.0% 70,700 142,700 9,735.00 25.0% 72,500 146,400 9,982.50 25.0% 142,700 217,450 27,735.00 28.0% 146,400 223,050 28,457.50 28.0% 217,450 388,350 48,665.00 33.0% 223,050 398,350 49,919.50 33.0% 105,062.00 35.0% 398,350 450,000 107,768.50 35.0% - - 450,000 125,846 39.6% Over Not over Tax % on excess 0 8,925 36,250 87,850 183,250 398,350 400,000 8,925 36,250 87,850 183,250 398,350 400,000 0.00 892.50 4,991.25 17,891.25 44,603.25 115,586.25 116,163.75 10.0% 15.0% 25.0% 28.0% 33.0% 35.0% 39.6% 388,350 - - Single - 2012 Single - 2013 Over Not over Tax % on excess 0 8,700 35,350 85,650 178,650 388,350 - 8,700 35,350 85,650 178,650 388,350 0.00 870.00 4,867.50 17,442.50 43,482.50 112,683.50 - 10.0% 15.0% 25.0% 28.0% 33.0% 35.0% - - Married filing separately - 2012 Married filing separately - 2013 Over Tax 0 8,700 0.00 10.0% 0 8,925 0.00 10.0% 8,700 35,350 870.00 15.0% 8,925 36,250 892.50 15.0% 35,350 5 Not over % on excess Over Not over Tax % on excess 71,350 4,867.50 25.0% 36,250 73,200 4,991.25 25.0% pwc
  6. 6. Global Watch 71,350 108,725 13,867.50 108,725 194,175 14,228.75 28.0% 33.0% 111,525 199,175 24,959.75 33.0% 35.0% 199,175 225,000 53,884.25 35.0% - - 111,525 52,531.00 - 73,200 24,332.50 194,175 28.0% - 225,000 62,923 39.6% Head of household - 2012 Head of household - 2013 Over Not over Tax % on excess Over Not over Tax % on excess 0 12,400 0.00 10.0% 0 12,750 0.00 10.0% 12,400 47,350 1,240.00 15.0% 12,750 48,600 1,275.00 15.0% 47,350 122,300 6,482.50 25.0% 48,600 125,450 6,652.50 25.0% 122,300 198,050 25,220.00 28.0% 125,450 203,150 25,865.00 28.0% 198,050 388,350 46,430.00 33.0% 203,150 398,350 47,621.00 33.0% 109,229.00 35.0% 398,350 425,000 112,037.00 35.0% - - 425,000 121,364.50 39.6% 388,350 - - *These rate tables are provided in Rev. Proc. 2013-15, which was recently re-released by the IRS to revise an advance copy previously issued. Let’s talk For a deeper discussion of how this issue might affect your business, please contact your IAS engagement team or one of the following IAS professionals: Peter Clarke, IAS Global Leader (203) 539-3826 peter.clarke@us.pwc.com Al Giardina (203) 539-4051 alfred.giardina@us.pwc.com Evelyn Behrend (267) 330-6220 evelyn.behrend@us.pwc.com Derek Nash (202) 414-1702 derek.m.nash@us.pwc.com Clarissa Cole (213) 217-3164 clarissa.cole@us.pwc.com © 2013 PricewaterhouseCoopers LLP. All rights reserved. In this document, PwC refers to PricewaterhouseCoopers (a Delaware limited liability partnership), which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. SOLICITATION This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. 6 pwc

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