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IRS Releases New Tax Tables and Remaining Inflation Adjusted Amounts for 2013
(Parker's Federal Tax Bulletin: January 19, 2013)
Now that the American Taxpayer Relief Act (Pub. L. 112-240) has been signed into law, the IRS has released the remaining 2013 inflation-adjusted numbers, including the 2013 tax rates. Rev. Proc. 2013-15.
Last October, the IRS issued inflation adjusted numbers for 2013. However, because of the uncertainty about the fiscal cliff and 2013 tax rates, the IRS withheld releasing some of those numbers. Now the IRS has released Rev. Proc. 2013-15, which provides the remaining 2013 inflation-adjusted numbers, including the 2013 tax rates. In addition, a change was made for 2012 relating to the amount excludible from income for the qualified transportation fringe benefit.
2013 Tax Rates
All 2013 tax rate tables for individuals, estates, and trusts reflect the new 39.6% maximum rate, which begins at the following levels of taxable income:
MFJ and Surviving Spouses - $450,000
Heads of Households - $425,000
Unmarried Individuals - $400,000
Married Filing Separately - $225,000
Estates and Trusts - $11,950
Adoption Credit
For tax years beginning in 2013, the credit allowed for an adoption of a child with special needs is $12,970. For tax years beginning in 2013, the maximum credit allowed for other adoptions is the amount of qualified adoption expenses up to $12,970. The available adoption credit begins to phase out for taxpayers with modified adjusted gross income in excess of $194,580 and is completely phased out for taxpayers with modified adjusted gross income of $234,580 or more.
Child Tax Credit
For tax years beginning in 2013, the value used to determine the amount of the child tax credit that may be refundable is $3,000.
Earned Income Credit
For tax years beginning in 2013, the maximum earned income credit amounts are as follows:
No Qualifying Children - $487
One Qualifying Child - $3,250
Two Qualifying Children - $5,372
Three or more Qualifying Children - $6,044
The earned income tax credit is not allowed in 2013 if the aggregate amount of certain investment income exceeds $3,300.
Hope Scholarship, American Opportunity, and Lifetime Learning Credits
For tax years beginning in 2013, the Hope Scholarship Credit is an amount equal to 100 percent of qualified tuition and related expenses not in excess of $2,000 plus 25 percent of those expenses in excess of $2,000, but not in excess of $4,000. Accordingly, the maximum Hope Scholarship Credit for tax years beginning in 2013 is $2,500.
A taxpayer's modified adjusted gross income in excess of $80,000 ($160,000 for a joint return) is used to determine the reduction in the amount of the Hope Scholarship Credit otherwise allowable. A taxpayer's modified adjusted gross income in excess of $53,000 ($107,000 for a joint return) is used to determine the reduction in the amount of the Lifetime Learning Credit otherwise allowable.
Exemption Amounts for Alternative Minimum Tax
For tax years beginning in 2013, the AMT exemption amounts are:
MFJ or Surviving Spouses - $80,800
Heads of Households - $51,900
Unmarried Individuals - $51,900
Married Filing Separately - $40,400
Estates and Trusts - $23,100
The excess taxable income above which the 28 percent tax rate applies is $89,750 for married individuals filing separate returns and $179,500 for joint returns, unmarried individuals (other than surviving spouses), and estates and trusts.
The amounts used under Code Sec. 55(d)(3) to determine the phaseout of the exemption amounts begins at the following AGI levels: MFJ and surviving spouses - $153,900; unmarried individuals and heads of households - $115,400; MFS, estates, and trusts - $76,950.
Standard Deduction
For tax years beginning in 2013, the standard deduction amounts are as follows:
MFS and Surviving Spouses - $12,200
Heads of Households - $8,950
Unmarried Individuals - $6,100
Married Filing Separately - $6,100
The standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of (1) $1,000, or (2) the sum of $350 and the individual's earned income.
The additional standard deduction amount for the aged or the blind is $1,200. The additional standard deduction amount is increased to $1,500 if the individual is also unmarried and not a surviving spouse.
For tax years beginning in 2013, the applicable amounts that are used to determine the phaseout of the deductions are $300,000 in the case of a joint return or a surviving spouse, $275,000 in the case of a head of household, $250,000 in the case of an unmarried individual, and $150,000 in the case of a married individual filing a separate return.
Qualified Transportation Fringe Benefit
For tax years beginning in 2013, the monthly limitation regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass is $245. The monthly limitation regarding the fringe benefit exclusion amount for qualified parking is also $245.
For tax years beginning in 2012, the monthly limitation regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass is $240. The monthly limitation regarding the fringe benefit exclusion amount for qualified parking is also $240 for 2012.
Adoption Assistance Programs
For tax years beginning in 2013, the amount that can be excluded from an employee's gross income for the adoption of a child with special needs is $12,970. For tax years beginning in 2013, the maximum amount that can be excluded from an employee's gross income for the amounts paid or expenses incurred by an employer for qualified adoption expenses furnished pursuant to an adoption assistance program for other adoptions by the employee is $12,970. The amount excludable from an employee's gross income begins to phase out for taxpayers with modified adjusted gross income in excess of $194,580 and is completely phased out for taxpayers with modified adjusted gross income of $234,580 or more.
Personal Exemption Phaseout
For tax years beginning in 2013, the personal exemption amount is $3,900. The AGI phaseout ranges for personal exemptions are as follows:
MFJ or Surviving Spouses - $300,000 to $422,500
Heads of Households - $275,000 to $397,500
Unmarried Individuals - $250,000 to $372,500
Married Filing Separately - $150,000 to 211,250
Interest on Education Loans
For tax years beginning in 2013, the $2,500 maximum deduction for interest paid on qualified education loans begins to phase out for taxpayers with modified adjusted gross income in excess of $60,000 ($125,000 for joint returns), and is completely phased out for taxpayers with modified adjusted gross income of $75,000 or more ($155,000 or more for joint returns).
Unified Credit Against Estate Tax
For an estate of any decedent dying during calendar year 2013, the basic exclusion amount is $5,250,000 for determining the amount of the unified credit against estate tax under Code Sec. 2010.
(Staff Editor at Parker Tax Publishing)
Parker Tax Pro Library - An Affordable Professional Tax Research Solution. www.parkertaxpublishing.com
Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.
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