IRS Releases 2013 Inflation-Adjusted Tax Tables, Personal Exemption Phase Out and Other Amounts Impacted by Year-End Legislation

IRS Releases 2013 Inflation-Adjusted Tax Tables, Personal Exemption Phase Out and Other Amounts Impacted by Year-End Legislation

The IRS has released inflation-adjusted amounts for the 2013 tax year, reflecting the recent enactment of the American Taxpayer Relief Act of 2012, The 2012 Taxpayer Relief Act extended the 2001 and 2003 Bush-era tax cuts for most but not all taxpayers, as well as numerous other tax benefits that otherwise would have expired at the end of 2012. Although the IRS traditionally publishes these inflation-adjusted figures well before the start of each year, the uncertainties surrounding the outcome of "fiscal cliff"negotiations created this unprecedented delay.

2013 Tax Rate Tables

For tax years beginning in 2013, the tax rate tables, as revised to reflect the 2012 Taxpayer Relief Act, are as follows:

Married Joint Filers/Surviving Spouses

$0 to $17,850	10% of taxable income
$17,850 to $72,500	$1,785 plus 15% of excess over $17,850
$72,500 to $146,400	$9,982.50 plus 25% of excess over $72,500
$146,400 to $223,050	$28,457.50 plus 28% of excess over $146,400
$223,050 to $398,350	$49,919.50 plus 33% of excess over $223,050
$398,350 to $450,000	$107,768.50 plus 35% of excess over $398,350
Over $450,000	$125,846 plus 39.6% of excess over $450,000

Heads of Households

$0 to $12,750	10% of taxable income
$12,750 to $48,600	$1,275 plus 15% of excess over $12,750
$48,600 to $125,450	$6,652.50 plus 25% of excess over $48,600
125,450 to $203,150	$25,865 plus 28% of excess over $125,450
$203,150 to $398,350	$47,621 plus 33% of excess over $203,0150
$398,350 to $425,000	$112,037 plus 35% of excess over $398,350
Over $425,000	$121,364.50 plus 39.6% of excess over $425,000

Unmarried individuals (other than surviving spouses or heads of household)

$0 to $8,925	10% of taxable income
$8,925 to $36,250	$892.50 plus 15% of excess over $8,925
$36,250 to $87,850	$4,991.25 plus 25% of excess over $36,250
$87,850 to $183,250	$17,891.25 plus 28% of excess over $87,850
$183,250 to $398,350	$44,603.25 plus 33% of excess over $183,250
$398,350 to $400,000	$115,586.25 plus 35% of excess over $398,350
Over $400,000	$116,163.75 plus 39.6% of excess over $400,000

Married Individuals Filing Separately

$0 to $8,925	10% of taxable income
$8,925 to $36,250	$892.50 plus 15% of excess over $8,925
$36,250 to $73,200	$4,991.25 plus 25% of excess over $36,250
$73,200 to $111,525	$14,228.75 plus 28% of excess over $73,200
$111,525 to $199,175	$24,959.75 plus 33% of excess over $111,525
$199,175 to $225,000	$53,884.25 plus 35% of excess over $199,175
Over $225,000	$62,923 plus 39.6% of excess over $225,000

Estates and Trusts

$0 to $2,450	15% of taxable income
$2,450 to $5,700	$367.50 plus 25% of excess over $2,450
$5,700 to $8,750	$1,180 plus 28% of excess over $5,700
$8,750 to $11,950	$2,034 plus 33% of excess over $8,750
Over $11,950	$3,090 plus 39.6% of excess over $11,950

Personal Exemption

For 2013, the personal exemption amount is $3,900. The exemption begins to phase out for taxpayers with adjusted gross income at or above $250,000 (single filers), $275,000 (heads of households), or $300,000 (joint filers). The exemption amount disappears completely for taxpayers with AGI of $372,501 (single filers), $397,501 (heads of households), or $422,501 (married filing jointly).

Children

Adoption credit. The 2013 adoption credit amount is $12,970, with a phase-out range for taxpayers with modified adjusted gross income between $194,580 and $234,580.

Child tax credit. The value used to determine the amount of the child tax credit that is refundable is $3,000.

Education

AOTC. The 2012 Taxpayer Relief Act extended the American Opportunity Tax Credit. The AOTC begins to phase out for single taxpayers with MAGI above $53,000 ($107,000 for joint filers).

Lifetime Learning Credit. A taxpayer’s MAGI above $53,000 ($107,000 for joint filers) is used to determine the reduction of a Lifetime Learning Credit amount.

Student loan interest. The 2012 Taxpayer Relief Act extended permanently the enhanced student loan interest deduction and phase-out range. For 2013, the maximum $2,500 deduction begins to phase out for single taxpayers with MAGI greater than $60,000 ($125,000 for joint filers). The deduction is phased out completely for taxpayers with income greater than $75,000 ($155,000 for joint filers).

Other Amounts

The AMT exemption amounts for 2013 are increased to $51,900, $40,400, and $80,800 for single filers, married separate filers, and joint filers, respectively. The AMT exemptions phase out for 2013 for taxpayers with alternative minimum taxable income of $115,400, $76,950, and $153,900 for single filers, married separate filers, and joint filers, respectively.

The 2013 maximum earned income tax credit is $6,044 for taxpayers with more than two qualifying children, $5,372 for taxpayers with two qualifying children, $3,250 for taxpayers with one qualifying child, and $487 for taxpayers with no qualifying children.

The monthly limitation on the aggregate fringe benefit exclusion for transportation in a commuter highway vehicle and any transit pass, and for qualified parking, is $245.

The 2013 exclusion amount for determining the amount of the unified credit against the estate tax is increased to $5,250,000.