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2013 Federal Income Tax Developments Affecting Individuals and Families

Posted by Alyson Wuamett on May 22, 2013 10:53:00 AM

Numbers, numbers, numbers – 2012 and 2013
The following list contains some of the “number” changes (many based on mandated inflation adjustments) that Magellan Jets thought you might find interesting and helpful for 2013 planning (with 2012 comparative numbers).  Please note that the “numbers” reflect American Taxpayer Relief Act, signed into law by President Obama on January 3, 2013. (A publication of Nixon Peabody LLP)

Federal Income Tax Items

2012

2013

Top federal marginal tax rate for ordinary income

(applicable for taxable income over $388,350 joint and single in 2012 and $450,000 joint and $400,000 single in

2013); lower tax brackets are 10%, 15%, 25%, 28%, and

33% in 2012 and 10%, 15%, 25%, 28%, 33% and 35% in

2013

 

35%

 

39.6%

Federal tax rate for long-term capital gains (assets held for

more than one year) for individuals in the 10% and 15% tax brackets (taxable income of up to $72,500 joint and $36,250 single in 2013)

 

0%

 

0%

Federal tax rate for long-term capital gains (assets held for

more than one year) for individuals in the 25%, 28%, 33% and 35% brackets (taxable income of up to $450,000 joint and $400,000 single in 2013)

 

15%

 

15%

Federal tax rate for long-term capital gains (assets held for

more than one year) for individuals in the 39.6% bracket

(taxable income over $450,000 joint and $400,000 single in

2013)

 

N/A

 

20%

Federal tax rate on the portion of long-term gain from real

estate that represents depreciation recapture (so-called

“Section 1250 gain”)

 

25%

 

25%

Federal tax rate on long-term gain from collectibles (art,

antiques, precious metals, gems, stamps, coins, etc.)

 

28%

 

28%

Federal tax rate on long-term gain on small business stock

eligible for the 50% exclusion

 

28%

 

28%

 

 

 

Federal Income Tax Items

2012

2013

Federal tax rate for qualifying dividend income for

individuals in the 10% and 15% tax brackets (taxable income of up to $72,500 joint and $36,250 single in 2013)

 

0%

 

0%

Federal tax rate for qualifying dividend income for

individuals in the 25%, 28%, 33% and 35% brackets

(taxable income of up to $450,000 joint and $400,000 single in 2013)

 

15%

 

15%

Federal tax rate for qualifying dividend income for

individuals in the 39.6% bracket (taxable income over

$450,000 joint and $400,000 single in 2013)

 

N/A

 

20%

Standard deduction

Married filing jointly

Head of household

Single or married filing separate returns

Additional amount for aged or blind

-    married filing jointly

-    single

 

$11,900

$8,700

$5,950

 

$1,150

$1,450

 

$12,200

$8,950

$6,100

 

$1,200

$1,500

Net unearned income of children under age 19 and

dependent fulltime students under 24 that escapes the

“kiddie” tax (child taxed at parent’s marginal rate)

 

$1,900

 

$2,000

“Kiddie” standard deduction

$950

$1,000

Personal exemption amount (subject to “phase out,” as noted

below)

$3,800

$3,900

Amount of 2013 taxable income at which the $3,900

personal exemption begins to “phase out.” In 2012, no phase out applies.

Married filing jointly Head of household Single

Married filing separately

 

N/A N/A N/A N/A

 

$300,000

$275,000

$250,000

$150,000

Applicable amount of 2013 adjusted gross income (AGI)

after which itemized deductions are reduced (by 3% of the AGI over this applicable amount).  In 2012, no reduction applies.

Married filing jointly Head of household Single

Married filing separately

 

N/A N/A N/A N/A

 

$300,000

$275,000

$250,000

$150,000

Taxable wage base for Social Security and self-employment

income

 

$110,100

 

$113,700

Per the Patient Protection and Affordable Care act (PPACA),

Medicare surtax on investment income when Modified Adjusted
Gross Income (MAGI) (AGI plus foreign earned income)
exceeds the following thresholds:

Married filing jointly - $250,000

Single - $200,000

Tax is assessed on the smaller of the filer’s investment income
 or the excess of MAGI over the applicable threshold amount.

Federal Transfer Tax Items

2012

2013

 

Top estate tax rate

 

35%

 

40%

 

Top gift tax rate

 

35%

 

40%

 

Top Generation Skipping Tax (GST) rate

 

35%

 

40%

 

Annual gift tax exclusion per donee

 

$13,000

 

$14,000

 

Applicable lifetime gift tax exemption

 

$5,120,000

 

$5,250,000

 

Applicable estate tax exemption

 

The exemption amount does not reflect “Portability,” which is the ability to utilize the unused estate exemption of a spouse who died in 2011 or later.

 

$5,120,000

 

$5,250,000

 

Applicable generation-skipping tax (GST) exemption

 

$5,120,000

 

$5,250,000

 

Spousal transfers during life or at death (U.S. citizens)

 

Unlimited

 

Unlimited

 

Annual gift tax exclusion for transfer to non-citizen spouse

 

$139,000

 

$143,000

 

Reporting threshold for gifts received from foreign corporations and partnerships

 

$14,723

 

$15,102

 

Reporting threshold for gifts received from non-resident aliens and foreign estates

 

$100,000

 

$100,000

Topics: Magellan Jets, Finance