Income Tax Changes for the 2013 Filing Year

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An overview of the tax law changes for preparing your 2013 income tax return.

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Income Tax Changes for the 2013 Filing Year

  1. 1. Income Tax Changes for 2014 (2013 Filing Year)
  2. 2. Inflation Adjustments  Standard Deduction Filing Status Single Amount 6,100 Married Filing Joint 12,200 Head of Household 8,950 Married Filing Separate 6,100  Personal Exemption  3,900 per person/dependent
  3. 3. Inflation Adjustments  IRA Contribution Limit Amount Regular 5,500 Age 50+ 6,500  IRA Deduction Phase-out Filing Status Modified AGI Single 59,000 – 69,000 Married Filing Joint Spousal IRA 95,000 – 115,000 178,000 – 188,000
  4. 4. Inflation Adjustments  401k & 403b Contribution Limit Amount Regular Age 50 Catch-up 17,500 5,500  Simple IRA Contribution Limit Amount Regular Age 50 Catch-up 12,000 2,500
  5. 5. Inflation Adjustments  Additional Standard Deduction  for age 65+ & blind Amount Married (per person) 1,200 Single, Head of Household 1,500  Maximum Earnings Subject to Social Security Tax  113,700 (per person)
  6. 6. Inflation Adjustments  Mileage Deduction Type Business Amount (per mile) 56.5 cents Medical/Moving 14 cents Charitable 24 cents
  7. 7. Alternative Minimum Tax (AMT)  AMT Thresholds Filing Status Amount All Single Filers 51,900 Married Filing Joint 80,800 Married Filing Separate 40,400
  8. 8. Additional Medicare Tax  An additional Medicare tax of 0.9% goes into affect in 2013 if Medicare wages, railroad retirement, and self-employment income exceed:  200,000 for all single filers  250,000 if Married Filing Joint  125,000 if Married Filing Separate  Additional Medicare Tax is reported on IRS Form 8959
  9. 9. Net Investment Income Tax  Net Investment Income Tax (NIIT) is new for 2013  NIIT is 3.8% of the smaller of  Net investment income, or  Excess of modified adjusted gross income over  200,000 for single filers  250,000 for Married Filing Joint  125,000 for Married Filing Separate
  10. 10. Tax Rates Increase  Tax rates have increased for high income earners  Top tax bracket is 39.6%  Capital Gains & Qualified Dividends  Maximum rate is 20% (was 15% for 2012)
  11. 11. Itemized Deductions  Medical/Dental Expenses  Deduction amount is limited to the portion over 10% of Adjusted Gross Income (7.5% if taxpayer or spouse is over 65)  Limit on Itemized Deductions  Deduction limited if Adjusted Gross Income is over:  250,000 if Single  300,000 if Married Filing Joint  275,000 if Head of Household  150,000 if Marred Filing Separate
  12. 12. Same-Sex Marriages  For filers with a same sex spouse legally married in a state that recognizes same sex marriages, you and your spouse are required to file Married Filing Joint or Married Filing Separate  Note: if a same sex couple legally marries in a state recognizes same sex marriages, then moves to another state, a Married Filing Joint return is still required.  Same-sex partners who fit the MFJ criteria may be eligible to amend their filing status for prior year returns (certain requirements apply)
  13. 13. Expired Credits  The plugin-electric vehicle credit cannot be claimed for 2013
  14. 14. Ponzi Schemes  New rules exist for 2013 regarding theft loss deduction due to Ponzi investment schemes  Investors may be able to claim these investment losses as an ordinary loss instead of a capital loss if certain requirements are met  Not subject to income percentage limits on Schedule A  Form 4684 has been revised for 2013
  15. 15. Health Flexible Spending Arrangements (FSAs)  Taxpayers cannot claim more that $2,500 in salary reduction contributions made to a FSA starting in the 2013 tax year.

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