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Uncertainty ends, at least when it comes to federal taxes. And it was a real cliff-hanger, if you’ll pardon the pun.

As of December 31, 2012, U.S. taxpayers faced significant increases in federal income, estate and gift taxes for 2013 as a result of Congressional inaction.

Then, on January 1, 2013, Congress passed the American Taxpayer Relief Act of 2012 (the Act) which President Obama signed into law on January 2.

The Act reduces income tax rates for the majority of Americans, as well as estate and gift tax rates. It also extends or reinstates (sometimes retroactively) a number of federal tax benefits and credits.

Quick Reference Guide
The following guide includes many of the most important federal tax amounts for 2013, and compares them to the amounts currently applicable for 2012.

 

Social Security and Medicare 2013 2012
Social Security taxable wage base $113,700 $110,100
Social Security tax

Employee

Self-employed

 

6.2%

12.4%

 

4.2%

10.4%

Medicare taxable wage base No limit No limit
Medicare tax

Employee

Self-employed

 

1.45%

2.9%

 

1.45%

2.9%

Medicare surtax (generally on net investment income of married couples with modified AGI > $250,000; $200,000 for single persons) 3.8%

 

 

N/A
Individual Retirement Accounts 2013 2012
Individual IRA, up to 100% of earned income (combined limit for traditional and/or Roth) $5,500 $5,000
Additional annual catch-up contributions for account owners age 50 and older (Roth and traditional IRA) $1,000 $1,000
Annual Qualified Plan Limits 2013 2012
Maximum compensation used to determine contributions $255,000 $250,000
Deferral limits for plans
     §401(k) and §403(b) $17,500 $17,000
     SIMPLE $12,000 $11,500
     §457 $17,500 $17,000
Additional catch-up contributions for employees, age 50 and older
     §401(k) and  §403(b) $5,500 $5,500
     SIMPLE $2,500 $2,500
     §457 $5,500 $5,500
Highly Compensated Employee threshold $115,000 $115,000
Compensation defining Key Employee in top-heavy plan $165,000 $165,000
Compensation triggering Simplified Employee Pension (SEP) contribution requirement $550 $550
Maximum annual addition for Defined Contribution Plan $51,000 $50,000
Maximum annual benefit for Defined Benefit Plan $205,000 $200,000
Federal Tax Rates 2013 2012
Maximum individual income tax rate 39.6% 35%
Taxable income beyond which top rate begins
   Married filing jointly
and surviving spouse
$450,000 $388,350
    Single $400,000 $388,350
    Head of household $425,000 $388,350
    Married filing separately $225,000 $194,175
Maximum rate for qualified capital gains and dividends 20% 15%
Hospital insurance tax (on income > $250,000 for married couples and $200,000 for single persons) 0.9% N/A
Standard Deduction 2013 2012
Married filing jointly and
surviving spouse
$12,200 $11,900
Single and married filing separately $6,100 $5,950
Head of household $8,950 $8,700
AMT Exemption Amounts 2013 2012
Married filing jointly and surviving spouse

 

$80,800 less
25% of AMT
income
> $153,900
$78,750 less
25% of AMT
income
> $150,000
Single

 

$51,900 less
25% of AMT
income
> $115,400
$50,600 less
25% of AMT
income
> $112,500
Married filing separately

 

$40,400 less
25% of AMT
income
> $76,950
$39,375 less
25% of AMT
income
> $75,000
Personal Exemption 2013 2012
Amount $3,900 $3,800
Personal Exemption
and Itemized Deduction
Phase-Out
2013 2012
Phase-out begins (adjusted gross income) N/A
    Married filing jointly
and surviving spouse
$300,000
    Single $250,000
    Head of household $275,000
    Married filing separately $150,000
Driving Deductions, Per Mile 2013 2012
Business mileage 56.5¢ 55.5¢
Charitable mileage 14.0¢ 14.0¢
Medical and moving mileage 24.0¢ 23.0¢
Business Equipment 2013 2012
Maximum Section 179 expense deduction $500,000 $500,000
Phase-Out for Section 179, based on asset additions $2 million $2 million
Qualified Transportation Fringe Benefit Exclusion 2013 2012
Commuter highway vehicle and transit pass, per month $245 $240
Qualified parking, per month $245 $240
Domestic Employees 2013 2012
Annual threshold when a domestic employer is liable to withhold and pay FICA for babysitters, housekeepers, etc. $1,800 $1,800
Kiddie Tax 2013 2012
For an under-age-19 child (or a full-time student under the age of 24), the net unearned income that is not subject to “kiddie tax” $2,000 $1,900
Federal Estate Tax 2013 2012
Maximum tax rate 40% 35%
Exemption amount, per decedent $5.25 million $5.12 million
Gift Tax 2013 2012
Annual amount, per recipient (without filing a gift tax return or reducing the lifetime gifting exemption amount) $14,000 $13,000
Lifetime gifting exemption $5.25 million $5.12 million
Exclusions, Deductions and Credits 2013 2012
Exclusion of gain on certain small business stock 100% 100%
Foreign income exclusion $97,600 $95,100
Bonus first-year depreciation 50% 100%
Major Reinstated and/or Extended Tax Benefits 2013 2012
State and local sales tax deduction Extended Reinstated
Deduction for elementary and secondary educator expenses Extended Reinstated
Deduction for higher education expenses Extended Reinstated
Nontaxable IRA distributions to certain charities Extended Reinstated
Increase in mass transit and parking benefits Extended Retroactive changes
Exclusion of forgiven debt on qualified principal residence Extended Existing
Research credit Extended Reinstated
Bonus first-year depreciation Extended Existing
15-year write-off for qualified leasehold and retail improvements and restaurant property Extended Reinstated
Work opportunity tax credit Extended Existing
American opportunity education credit Extended Existing
New markets tax credit Extended Reinstated
Portability of deceased spouse’s unused estate tax exemption Extended Existing
Energy-efficient home credit Extended Existing
Nonbusiness energy property credit Extended Reinstated
Energy-efficient appliances credit Extended Reinstated
Biodiesel fuels credit Extended Reinstated

 

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