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