The IRS released the inflation-adjusted amounts for 2013 individual tax returns.
- The standard deduction increases to $6,100 single and $12,200 married filing jointly.
- The personal exemption increases $100 to $3,900. Those with adjusted gross income (AGI) of more than $150,000 single and $300,000 married filing jointly will see their exemption reduced.
- The maximum Earned Income Tax Credit increases slightly to $6,044.
- The new 39.6% top tax rate applies to individuals with taxable income of more than $400,000, $450,000 for those married filing jointly. All other rates remain the same as 2012.
- Those with AGI of $250,000 single and $300,000 married filing jointly will see their itemized deductions reduced by up to 20%.
These changes present some significant planning issues for those who will have income in any of the ranges mentioned above. We’re here to help take the guess work out of your tax situation, and to help reduce your tax exposure as much as possible.