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2013 Tax Updates
INDIVIDUAL
2013 FILING REQUIREMENTS FOR MOST TAX PAYERS
2013 FILING REQUIREMENTS FOR DEPENDENTS
2013 STANDARD DEDUCTION
2013 EXEMPTION AMOUNTS
2013 STANDARD MILEAGE RATES
2013 TRADITIONAL IRA LIMITS
2013 PHASE OUT FOR IRA DEDUCTIONS
2013 DEPENDENT CARE CREDIT CALCULATION
2013 COMPARISON OF EDUCATION CREDITS
2013 EDUCATION CREDITS PHASEOUT
2013 MEDICAL SAVINGS ACCOUNT (MSA)
2013 HEALTH SAVINGS ACCOUNT (HSA)
2013 ADOPTION CREDIT
2013 STUDENT LOAN INTEREST DEDUCTION
2013 TAX RATE SCHEDULE - SINGLE
2013 TAX RATE SCHEDULE – HEAD OF
HOUSEHOLD (HoH)
2013 TAX RATE SCHEDULE – MAIIRED FILING SEPARATE
2013 TAX RATE SCHEDULE – MARRIED FILING JOINTLY OR QUALIFYING WIDOW(ER)
2013 EARNED INCOME CREDIT (EIC)
2013 EARNED INCOME CREDIT (EIC) IN A NUTSHELL
2013 WHERE TO DEDUCT YOUR INTEREST EXPENSE
2013 DOMESTICE PRODUCTION ACTIVITIES DEDUCTION
2013 KIDDIE TAX
2013 FOREIGN EARNED INCOME
2013 GIFT TAX
2013 401K CONTRIBUTION LIMITS
2013 LONG TERM CAPITAL GAINS AND QUALIFYING DIVIDENDS
2013 SAVINGS BONDS / HIGHER EDUCATION EXPENSE EXCLUSION
2013 QUALIFIED TRANSPORATION FRINGE BENEFIT EXCLUSION
2013 LONG TERM CARE PREMIUMS
 
BUSINESS
SECTION 179 EXPENSE LIMIT
FICA (SOCIAL SECURITY AND MEDICARE) WAGE BASE
MACRS RECOVERY PERIODS
CORPORATE TAX RATE SCHEDULE
ESTATE AND TRUST TAX RATES
 
2013 FILING REQUIREMENTS FOR MOST TAX PAYERS

If your filing status is

AND at the end of 2013 you were

THEN file a return if your gross income was at least
income was at least

Single

Under 65
65 or older

$10,000
$11,500

Married filing jointly

Under 65 (both spouses)
65 or older (one spouse)
65 or older (both spouses)

$20,000
$21,200
$22,400

Married filing separately

Any age

$3,900

Head of household

Under 65
65 or older

$12,850
$14,350

Qualifying widow(er) with dependent child

Under 65
65 or older

$16,100
$17,300

2013 FILING REQUIREMENTS FOR DEPENDENTS

If your parent (or someone else) can claim you as a dependent, use this chart to see if you must file a return. In this chart, unearned income includes taxable interest, ordinary dividends, and capital gain distributions. Earned income includes wages, tips, and taxable scholarship and fellowship grants. Gross income is the total of your unearned and earned income.

SINGLE DEPENDENTS:
Were you either age 65 or older or blind?

  • No. You must file a return if any of the following apply.

• Your unearned income was over $1,000.
• Your earned income was over $6,100.
• Your gross income was more than the larger of —
• $1,000, or
• Your earned income (up to $5,750) plus $350.

  • Yes. You must file a return if any of the following apply.

• Your unearned income was over $2,500 ($4,000 if 65 or older and blind).
• Your earned income was over $7,600 ($9,100 if 65 or older and blind).
• Your gross income was more than the larger of–
• $ 2,500 ($4,000 if 65 or older and blind), or
• Your earned income (up to $5,750) plus $1,850 ($3,350 if 65 or older and blind).

 

MARRIED DEPENDENTS:
Were you either age 65 or older or blind?

  • No. You must file a return if any of the following apply.

• Your unearned income was over $1,000.
• Your earned income was over $6,100.
• Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
• Your gross income was more than the larger of —
• $1,000, or
• Your earned income (up to $5,750) plus $350.

  • Yes. You must file a return if any of the following apply.

• Your unearned income was over $2,200 ($3,400 if 65 or older and blind).
• Your earned income was over $7,300 ($8,500 if 65 or older and blind).
• Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.
• Your gross income was more than the larger of—
• $2,200, or ($3,400 if 65 or older and blind) or
• Your earned income (up to $5,750) plus $1,550 ($2,750 if 65 or older and blind).

OTHER SITUATIONS WHEN YOU MUST FILE A 2013 RETURN

You must file a return if any of the four conditions below apply for 2013.
1. You owe any special taxes, including any of the following.

a. Alternative minimum tax.

b. Additional tax on a qualified plan, including an individual retirement arrangement (IRA), or other tax-favored account. But if you are filing a return only because you owe this tax, you can file Form 5329 by itself.

c. Household employment taxes. But if you are filing a return only because you owe this tax, you can file Schedule H by itself.

d. Social security and Medicare tax on tips you did not report to your employer or on wages you received from an employer who did not withhold these taxes.

e. Write-in taxes, including uncollected social security and Medicare or RRTA tax on tips you reported to your employer or on group-term life insurance and additional tax on health savings account distributions. See the instructions for line 63 on page 42.

f. Recapture taxes. See the instructions for line 44, that begin on page 33, and line 63, on page 42.

g. Additional tax on a health savings account from Form 8889, Part III.

2. You received any advance earned income credit (EIC) payments from your employer. These payments are shown in Form W-2, box 9.

3. You had net earnings from self-employment of at least $400.

4. You had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes.


2013 STANDARD DEDUCTION

If your filing status is

Base Amount(USD)
(Amount USD)

Additional amount for blindness or age over 65 years (USD)

Single

6,100

1,500

Married filing jointly

12,200

1,200

Married filing single

6,100

1,200

Head of household (HoH)

8,950

1,500

Qualifying widow(er) with dependant child

12,200

1,200

Dependant of another

1,000 or Earned income + 350

1,200 or 1,500 if single or HoH

2013 EXEMPTION AMOUNTS

Personal and dependent

$3,900

Estate Amount

$600.00

Simple Trust *

$300.00

Complex Trust*

$100.00

* Exemption not allowed in final year

2013 STANDARD MILEAGE RATES

Type

Mileage rate per mile

Business Mileage

56.5 cents / mile

Charitable Mileage

14 cents / mile

Medical/Moving Mileage

24 cents / mile

 2013 TRADITIONAL IRA LIMITS
IRA contribution limits for those who do not participate in employee sponsored plan
Regular contributions $5,500.00
‘Catch up’ contributions for taxpayers 50 and over $6,500.00
2013 PHASE OUT OF IRA DEDUCTIONS

FILING STATUS

AGI begin phase out

AGI fully phased out

Single or Married filing separate and lived apart from spouse for all of 2013

$59,000

$69,000

Married filing jointly (if spouse is covered by a pension plan)

$95,000

$115,000

Married filing jointly (if spouse is not covered by a pension plan)

$178,000

$188,000

Married filing separate

0

$10,000

Head of Household

$59,000

$69,000

Qualifying Widow(er)

$95,000

$115,000

2013 DEPENDENT CARE CREDIT CALCULATION

To determine the amount of dependent care credit, multiply the amount of your work related expenses (after applying earned income and dollar limits) by percentage mentioned in column 3. To determine what percentage you need to use, find out your adjusted gross income (AGI) from Form 1040. The following table shows the percentage to be used based on your AGI. The maximum eligible to be multiplied with these percentages is $3,000 per child and $6,000 per return.

 

If your adjusted gross income is

Then the percentage is

Over (USD)

But not over (USD)

 

0

15,000

35

15,000

17,000

34

17,000

19,000

33

19,000

21,000

32

21,000

23,000

31

23,000

25,000

30

25,000

27,000

29

27,000

29,000

28

29,000

31,000

27

31,000

33,000

26

33,000

35,000

25

35,000

37,000

24

37,000

39,000

23

39,000

41,000

22

41,000

43,000

21

43,000

No limit

20

2013 COMPARISON OF EDUCATION CREDITS

Lifetime Learning Credit

American Opportunity

Up to $2,000

Up to $2,500 / 40% deductible

Maximum Lifetime learning rate is 20%

100% for first $2,000 Plus 25% on next $2,000

Available for all years of post-secondary education and for courses to acquire or improve job skills

Available for four years of college

Available for an unlimited number of years  

Student does not need to be pursuing a degree or other recognized educational credential

AGI Phase Out between $80,000 -$90,0000 (160K – 180K)

Available for one or more courses

Student must be enrolled for at least one academic period beginning during the year

Felony drug conviction rule does not apply

As of the end of 2013, the student must not be convicted for possession or distributing a controlled substance.

2013 EDUCATION CREDITS PHASEOUT

 

HOPE LEARNING CREDIT

AMERICAN OPPORTUNITY CREDIT

Married filing jointly

$107,000 to $127,000

$160,000 to $180,000

All other filing statuses

$53,000 to $63,000

$80,000 to $90,000

2013 MEDICAL SAVINGS ACCOUNT (MSA)

2013 Premium For High Deductible

Self Coverage

$2,150 - $3,200

Family Coverage

$4,300 - $6,450

Maximum Out of Pocket

Self Coverage

$4,300

Family Coverage

$7,850

2013 HEALTH SAVINGS ACCOUNT (HSA)

2013 Maximum Annual Contributions Limits

Self Coverage

$3,250

Family Coverage

$6,450

2013 Minimum Deductible

Self Coverage $1,250
Family Coverage $2,500

2013 Maximum Out of Pocket

Self Coverage $6,250
Family Coverage $12,500

Additional over age 55

2013 and after $1,000
2013 ADOPTION CREDIT
Maximum credit for a child with special needs

$12,970

Other adoptions qualified expenses

Up to $12,970

Phase out range (modified adjusted gross income)

$194,850 - $234,580

2013 STUDENT LOAN INTEREST DEDUCTION
Maximum Interest deduction

$2,500

Modified Adjusted Gross Income phase out

Married filing jointly

$125,000 - $155,000

Single / Head of Household

$60,000 - $75,000

2013 TAX RATE SCHEDULE - SINGLE
Taxable Income (USD) Tax (USD)

Over

But not over

Tax

+ %

On amount over (USD)

0

8,925

0

10

0

8,925

36,250

892.50

15

8,925

36,250

87,850

4,991.25

25

36,250

87,850

183,250

17,891.25

28

87,850

183,250

398,350

44,603.25

33

183,250

398,350

400,000

115,586.25

35

398,350

400,000 ---------- 116,163.75 39.6 400,000
2013 TAX RATE SCHEDULE – HEAD OF HOUSEHOLD (HoH)

Taxable Income (USD)

Tax (USD)

Over

But not over

Tax (USD)

+ %

On amount over

0

12,750

0

10

0

12,750

48,600

1,275.00

15

12,750

48,600

125,450

6,652.50

25

48,600

125,450

203,150

25,865.00

28

125,400

203,150

398,350

47,621.00

33

203,150

398,350

425,000

112,037.00

35

398,350

425,000 ---------- 121,364.50 39.6 425,000
2013 TAX RATE SCHEDULE – MAIIRED FILING SEPARATE

Taxable Income (USD)

Tax (USD)

Over

But not over

Tax (USD)

+ %

On amount over

0

8,925

0

10

0

8,925

36,250

892.50

15

8,925

36,250

73,200

4,991.25

25

36,250

73,200

111,525

14,228.75

28

73,200

111,525

199,175

24,959.75

33

111,525

199,175

225,000

53,884.25

35

199,175

225,000 ---------- 62,923.00 39.6 225,000
2013 TAX RATE SCHEDULE – MARRIED FILING JOINTLY OR QUALIFYING WIDOW(ER)

Taxable Income (USD)

Tax (USD)

Over

But not over

Tax (USD)

+ %

On amount over

0

17,850

0

10

0

17,850

72,500

1,785.00

15

17,850

72,500

146,400

9,982.50

25

72,500

146,400

223,050

28,457.50

28

146,400

223,050

398,350

49,919.50

33

223,050

398,350

450,000

107,768.50

35

398,350

450,000 ---------- 128,846.00 39.5 450,000
2013 EARNED INCOME CREDIT (EIC)

Single, Head of Household, and Qualifying Widow(er)

Earned income range to receive the maximum EIC(USD)

Maximum EIC amount(USD)

Maximum earnings before EIC eliminated (USD)

 

From

To

 

 

With no children

6,350

8,000

487

14,340

With one child

9,550

17,550

3,250

37,870

With two children

13,400

17,550

5,372

43,038

With three children 13,400 17,550 6,044 46,227

 

 

 

 

 

Married filing jointly

Earned income range to receive the maximum EIC (USD)

Maximum EIC amount (USD)

Maximum earnings before EIC eliminated (USD)

With no children

6,350

13,350

487

19,680

With one child

9,550

22,900

3,250

43,210

With two children

13,400

22,900

5,372

48,378

With three children 13,400 22,900 6,044 51,567
2013 EARNED INCOME CREDIT (EIC) IN A NUTSHELL

First, you must meet all the rules in this column

Second, you must meet all the rules in one of these columns, whichever applies

Third, you must meet the rule in this column

Part A
Rules for everyone

Part B

Rules if you have a qualifying child

 

Part C
Rules if you do not have a qualifying child

Part D
Figuring and claiming the EIC

1. Your adjusted gross income (AGI) must be less than
-- $46,227 ($51,567 for mar­ried filing joint) if you have three qualifying children.
-- $43,058 ($48,378 for married filing joint) if you have two qualifying children.
-- $37,870 ($43,210 for married filing joint) if you have one qualifying child.
-- $14,340 ($19,680 for married filing jointly) if you do not have a qualifying child
2. You must have a valid social security number.
3. Your filing status cannot be “married filing separate.”
4. You must be a U.S. citizen or resident alien all year.
5. You cannot file Form 2555 or Form 2555-EZ (relating to foreign earned income).
6. Your investment income must be $3,200 or less.

7. You must have earned income.

8. Your child must meet the relationship, age, and residency tests.
9. Your qualifying
child cannot be used
by more than one
person to claim the
EIC.

10. You cannot be a qualifying child of another person

11. You must be at least 25 but under age 65.
12. You cannot be the dependent of another person.
13. You cannot be a qualifying child of another person.

14. You must have lived in the United States more than half of the year.


15. Your earned income must be less than $46,227 ($51,567 for married filing joint) if you have three qualifying children. 

$43,058 ($48,378 for married filing joint) if you have two qualifying children.

$37,870 ($43,210 if married filing joint) if you have one qualifying child.

$14,340 ($19,680 for married filing joint) if you do not have a qualifying child.
2013 WHERE TO DEDUCT YOUR INTEREST EXPENSE

IF YOU HAVE

THEN DEDUCT IT ON

AND for more information go to

Deductible student loan interest

Form 1040, line 33 or Form 1040A, line 18

Publication 970

Deductible home mortgage interest and points reported on Form 1098

Schedule A (Form 1040) line 10

Publication 936

Deductible home mortgage interest not reported on Form 1098

Schedule A (Form 1040) line 11

Publication 936

Deductible points not reported on Form 1098

Schedule A (Form 1040) line 12

Publication 936

Deductible investment interest (other than interest incurred to produce rents or royalties)

Schedule A (Form 1040) line 14

Publication 550

Deductible business interest (non-farm)

Schedule C or C-EZ (Form 1040)

Publication 535

Deductible farm business interest

Schedule F (Form 1040)

Publications 225 and 535

Deductible interest incurred to produce rents or royalties

Schedule E (Form 1040)

Publications 527 and 535

Personal interest

Not Deductible

 


2013 DOMESTIC PRODUCTION ACTIVITIES DEDUCTION
The deduction rate for 2013 is 9%

Deduction reduced by 3% if the taxpayer has any oil related qualified production activities income


2013 KIDDIE TAX
2013 Age Limit up to 18, and certain under 24
2013 Unearned Income Limitation $2,000

2013 FOREIGN EARNED INCOME

2013 Maximum Exclusion

$97,600


2013 GIFT TAX

2013 Exclusion

$14,000

2013 Exclusion for gift to spouse who is not a U.S. Citizen

$143,000


2013 401(k) CONTRIBUTION LIMITS

2013 Maximum Deferral

$17,500

2013 Catch Up Contributions for taxpayers 50 and over

$23,000


2013 LONG TERM CAPITAL GAINS AND QUALIFYING DIVIDENDS

Single up to

$36,250

0%

Single

$36,250 to $400,000

15%

Single Over

$400,000

20%

Married up to

$72,500

0%

Married $72,500 to $450,000 15%
Married Over $450,000 20%
HOH up to $48,600 0%
HOH $48,600 to $425,000 15%
HOH Over $425,000 20%
Tax on uncaptured Sec 1250 gain   25%
Capital gain rates on collectibles   28%

2013 SAVINGS BONDS / HIGHER EDUCATION EXPENSE EXCLUSION

Modified adjusted gross income phase out range:

Married Filing Joint

$112,050 - $142,050

All other filing status

$74,700 - $89,700


2013 QUALIFIED TRANSPORATION FRINGE BENEFIT EXCLUSION

Commuter highway vehicle and transit pass

$245

Qualified parking

$245


2013 LONG TERM CARE PREMIUMS

Maximum premium (per person)

Age 40 or under

$360

Age 41 to 50

$680

Age 51 to 60

$1,360

Age 61 to 70

$3,640

Age 71 or over $4,500
BUSINESS
 
2013 SECTION 179 EXPENSE LIMIT

Expense limit

$500,000

Phase out Threshold

$2,000,000

2013 FICA (SOCIAL SECURITY AND MEDICARE) WAGE BASE

Social Security Wage Base

$113,700

Maximum Social Security Amount

$7,049

Medicare Wage Base

No ceiling

Maximum Medicare wage tax

No ceiling

2013 MACRS RECOVERY PERIODS

Type of property

MACRS recovery period

 

General Depreciation System

Alternative Depreciation System

Computers and their peripheral equipment

5 years

5 years

Office machinery such as :
-- Typewriters
-- Calculators
-- Copiers

5 years

6 years

Automobiles

5 years

5 years

Light Trucks

5 years

5 years

Appliances such as:
-- Stoves
-- Refrigerators

5 years

9 years

Carpets

5 years

9 years

Furniture used in rental property

5 years

9 years

Office furniture and equipment such as:
-- Desks
-- Files

7 years

10 years

Any property that does not have a class life  and that has not been designated by law as being in any other class

7 years

12 years

Roads

15 years

20 years

Shrubbery

15 years

20 years

Fences

15 years

20 years

Residential rental property
Buildings and structures and structural components such as furnaces, water pipes, venting etc.

27.5 years

40 years

Nonresidential real property

39 years

40 years

Additions and improvements such as new roof

The same recovery period as that of the property to which the addition or improvement is made, determined as if the property were placed in service at the same time as the addition or improvement.

2013 CORPORATE TAX RATE SCHEDULE

Taxable Income (USD)

Tax (USD)

Over

But not over

Tax (USD)

+ %

On amount over

0

50,000

0

15

0

50,000

75,000

7,500

25

50,000

75,000

100,000

13,750

34

75,000

100,000

335,000

22,250

39

100,000

335,000

10,000,000

11,3900

34

335,000

10,000,000

15,000,000

3,400,000

35

10,000,000

15,000,000

18,333,333

5,150,000

38

15,000,000

18,000,000

NO LIMIT

----------

35

0

2013 ESTATE AND TRUST TAX RATES

Taxable Income (USD)

Tax (USD)

Over

But not over

Tax (USD)

+ %

On amount over

0

2,450

0

15

0

2,450

5,700

367.50

25

2,450

5,700

8,750

1,180.00

28

5,700

8,750

11,950

2,034.00

33

8,750

11,950

----------

3,090.00

39.5

11,950

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