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IRS Announces 2013 Tax Rates, Standard Deduction Amounts and More

January 15, 2013 · 0 comments

The IRS has released the tax tables for 2013 as well as the cost-of-living adjustments for inflation for certain tax items.

But wait… before you read any further, promise me something? You understand that these are the applicable rates for the tax year 2013, right? They are NOT the rates that you’ll use to prepare your 2012 tax returns in 2013 but rather the rates that you’ll use to prepare your 2013 tax returns in 2014. I know it’s confusing but promise you won’t mix up the two (or at least that you’ll trust your tax preparer to keep them straight).

Here you go:

Married Taxpayers Filing Jointly

Head of Household

Individual Taxpayers

Married Taxpayers Filing Separate

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 with modified adjusted gross income (MAGI) over $194,580 and the credit is completely phased out for taxpayers with MAGI of more than $234,580. By way of explanation, your MAGI is generally your adjusted gross income (AGI), found at line 37 of your federal form 1040, with certain tax preference items like deductions for student loan interest and IRA contributions added back in.

Child Tax Credit. The value (as outlined under § 24(d)(1)(B)(i)) used to determine the amount of refundable credit is $3,000.

American Opportunity Credit. The “supercharged” Hope Scholarship Credit, known as the American Opportunity Tax Credit will be limited to $2,500. Phaseouts apply for the credit beginning with MAGI over $80,000 ($160,000 for married taxpayers filing jointly).

Earned Income Credit (EITC). The EITC numbers for 2013 are as follows:

Personal Exemptions. The personal exemption amount is $3,900. PEP (personal exemption phaseouts) apply.

Standard Deduction Rates. The applicable standard deduction rates for 2013 are $12,200 for married taxpayers filing jointly; $8,950 for head of household; $6,100 for individual taxpayers and $6,100 for married taxpayers filing separate. For purposes of the standard deduction, the amount under §63(c)(5) for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of $1,000 OR ($350 + the individual’s earned income). The additional standard deduction amount for the aged or the blind is $1,200; that amount is increased 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 for single 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 for married taxpayers filing jointly; $51,900 for individual taxpayers; and $40,400 for married taxpayers filing separate.

The IRS included a few other adjustments at Rev Proc 2013-15. You can read it here if you have interest (downloads as a pdf).

If you’re looking for a more extensive (and general) explanation of the tax changes for 2013, you can find my explanation here.

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