2013 Personal Income Tax Rates changed. Click on link below to see current rate for each income level.

key_numbers.pdf | |
File Size: | 97 kb |
File Type: |
Notes:
FRAUDULENT E-MAILS FROM THE "IRS" or "State"-
Recently many clients have contacted us in reference to e-mails received from the IRS. These are fraudulent attempts to steal your identity. The IRS does not e-mail taxpayers. All initial contact from the IRS is always via regular U.S. Postal Service. Therefore, if you receive mail via Fedex, UPS, etc., you should also consider it to be a scam. If you have any questions call the IRS (800) 829-1040 or State. Click fraud alert page for further discussion on tax fraud challenges facing taxpayers and the IRS. Of course, always feel free to call us if you have any questions on communications received.
Important Tax Law Provisions/ Changes for 2012/ 13
Most existing tax laws remained in effect; some where updated. This is mostly good news!
Here’s a summary of items affecting many clients:
A. TAX RATES
1) Income Tax
Rate rise for Single / Married making over $400,000/
$450,000.
2) Social Security
Rate rose by 2% from 4.2% to 6.2%. AFFECTS EVERYONE with earned income as employee or contractor. You’ll note it on your paycheck, estimated payments or Self Employment Tax.
3) Capital Gains and Dividends
Rate rose by 5% from 15% to 20% for Single / Married making over $400,000 / $450,000.
4) Alternative Minimum Tax
Income threshold was increased (GREAT NEWS!). That is, the current exemption of $33,750 for Single and $45,000 for Married was increased to $50,600 Single and $78,750 Married. This means more persons will avoid getting deductions limited or eliminated altogether.
5) Obama Health Bill
a) Income Tax Rate increases by .9% for Single / Married making over $200,000 / $250,000.
b) Capital Gains Tax Rate increased by 3.8% for those in this tax bracket.
B. BUSINESS
1) Depreciation provisions remain in place for Accelerated Depreciation Rates (MACRS), Section 179 ($500,000 maximum and First Year Bonus Depreciation (50% of cost).
2) Work Opportunity Credit related to new hires was extended.
3) Corporate Income Tax Rates were not changed. However, pass through entities such as S-Corp, LLC and Partnership will
be taxed at the new rates as applicable.
4) Producer, Manufacturer Exporter Credit (IC-DISC) –
Exporters credit (including manufacturers, computer software, architects,
engineers). Income from such activities is taxed as dividends rather than
ordinary income.
C. DEDUCTIONS
Personal Exemption and Itemized Deductions -
Most deductions that were available in past remain in place (good news!); however, Singles making over $250,000 and Married filers making over $300,000 may be limited or outright lose exemptions and/ or deductions.
D. CREDITS
Significant common credits remain available, including:
a) Child Tax Credit
b) Education Credit
c) Earned Income Credit
d) Home Energy Efficient Improvements Credit
E. RETIREMENT ACCOUNTS
Eligibility to make deductible / qualifying contributions to a
Traditional or Roth IRA is tied to income levels and coverage by employer, as in past. Contribution limits will be increased by $500 for tax year 2013.
IRA Deduction Limit
a) Up to 50 Years Old - $5,000
b) Over 50 Years Old - $6,000
Recently many clients have contacted us in reference to e-mails received from the IRS. These are fraudulent attempts to steal your identity. The IRS does not e-mail taxpayers. All initial contact from the IRS is always via regular U.S. Postal Service. Therefore, if you receive mail via Fedex, UPS, etc., you should also consider it to be a scam. If you have any questions call the IRS (800) 829-1040 or State. Click fraud alert page for further discussion on tax fraud challenges facing taxpayers and the IRS. Of course, always feel free to call us if you have any questions on communications received.
Important Tax Law Provisions/ Changes for 2012/ 13
Most existing tax laws remained in effect; some where updated. This is mostly good news!
Here’s a summary of items affecting many clients:
A. TAX RATES
1) Income Tax
Rate rise for Single / Married making over $400,000/
$450,000.
2) Social Security
Rate rose by 2% from 4.2% to 6.2%. AFFECTS EVERYONE with earned income as employee or contractor. You’ll note it on your paycheck, estimated payments or Self Employment Tax.
3) Capital Gains and Dividends
Rate rose by 5% from 15% to 20% for Single / Married making over $400,000 / $450,000.
4) Alternative Minimum Tax
Income threshold was increased (GREAT NEWS!). That is, the current exemption of $33,750 for Single and $45,000 for Married was increased to $50,600 Single and $78,750 Married. This means more persons will avoid getting deductions limited or eliminated altogether.
5) Obama Health Bill
a) Income Tax Rate increases by .9% for Single / Married making over $200,000 / $250,000.
b) Capital Gains Tax Rate increased by 3.8% for those in this tax bracket.
B. BUSINESS
1) Depreciation provisions remain in place for Accelerated Depreciation Rates (MACRS), Section 179 ($500,000 maximum and First Year Bonus Depreciation (50% of cost).
2) Work Opportunity Credit related to new hires was extended.
3) Corporate Income Tax Rates were not changed. However, pass through entities such as S-Corp, LLC and Partnership will
be taxed at the new rates as applicable.
4) Producer, Manufacturer Exporter Credit (IC-DISC) –
Exporters credit (including manufacturers, computer software, architects,
engineers). Income from such activities is taxed as dividends rather than
ordinary income.
C. DEDUCTIONS
Personal Exemption and Itemized Deductions -
Most deductions that were available in past remain in place (good news!); however, Singles making over $250,000 and Married filers making over $300,000 may be limited or outright lose exemptions and/ or deductions.
D. CREDITS
Significant common credits remain available, including:
a) Child Tax Credit
b) Education Credit
c) Earned Income Credit
d) Home Energy Efficient Improvements Credit
E. RETIREMENT ACCOUNTS
Eligibility to make deductible / qualifying contributions to a
Traditional or Roth IRA is tied to income levels and coverage by employer, as in past. Contribution limits will be increased by $500 for tax year 2013.
IRA Deduction Limit
a) Up to 50 Years Old - $5,000
b) Over 50 Years Old - $6,000