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Irs announces 2013 tax rates


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Irs announces 2013 tax rates

  1. 1. IRS Announces 2013 Tax Rates, StandardDeduction Amounts and MoreComment NowFollow CommentsFollowingCommentsUnfollow CommentsThe IRS has released the tax tables for 2013 as well as the cost-of-living adjustments forinflation for certain tax items.But wait… before you read any further, promise me something? You understand that these arethe applicable rates for the tax year 2013, right? They are NOT the rates that you’ll use toprepare your 2012 tax returns in 2013 but rather the rates that you’ll use to prepare your 2013 taxreturns in 2014. I know it’s confusing but promise you won’t mix up the two (or at least thatyou’ll trust your tax preparer to keep them straight).Here you go: Married Taxpayers Filing Jointly Head of Household
  2. 2. Individual TaxpayersMarried Taxpayers Filing Separate
  3. 3. The IRS has also indexed a few credits for 2013. Here are the updated amounts:Adoption Credit. The maximum credit allowable is $12,970. Phaseouts apply for taxpayers withmodified adjusted gross income (MAGI) over $194,580 and the credit is completely phased outfor taxpayers with MAGI of more than $234,580. By way of explanation, your MAGI isgenerally your adjusted gross income (AGI), found at line 37 of your federal form 1040, withcertain tax preference items like deductions for student loan interest and IRA contributions addedback in.Child Tax Credit. The value (as outlined under § 24(d)(1)(B)(i)) used to determine the amountof refundable credit is $3,000.American Opportunity Credit. The “supercharged” Hope Scholarship Credit, known as theAmerican Opportunity Tax Credit will be limited to $2,500. Phaseouts apply for the creditbeginning with MAGI over $80,000 ($160,000 for married taxpayers filing jointly).Earned Income Credit (EITC). The EITC numbers for 2013 are as follows:
  4. 4. Personal Exemptions. The personal exemption amount is $3,900. PEP (personal exemptionphaseouts) apply.Standard Deduction Rates. The applicable standard deduction rates for 2013 are $12,200 formarried taxpayers filing jointly; $8,950 for head of household; $6,100 for individual taxpayersand $6,100 for married taxpayers filing separate. For purposes of the standard deduction, theamount under §63(c)(5) for an individual who may be claimed as a dependent by anothertaxpayer cannot exceed the greater of $1,000 OR ($350 + the individual’s earned income). Theadditional standard deduction amount for the aged or the blind is $1,200; that amount isincreased to $1,500 if the taxpayer is single and not a surviving spouse.Itemized Deductions. The limitations on itemized deductions (the Pease limitations) kick in at$300,000 for married taxpayers filing jointly, $275,000 for head of household, $250,000 forsingle taxpayers and $150,000 in the case of a married individual filing separately.Alternative Minimum Tax (AMT). The applicable AMT thresholds for 2013 are $80,800 formarried taxpayers filing jointly; $51,900 for individual taxpayers; and $40,400 for marriedtaxpayers filing separate.