Tax Law changes - 2013

The maximum Earned Income Credit amount is $6,044 for taxpayers filing jointly who have three or more qualifying children, up from a total of $5,891 for tax year 2012.

The (AMTE) Alternative Minimum Tax Exemption amount is $53,900 ($83,800, for married couples filing jointly),

The personal exemption amount rises to $3,900, up from the 2012 exemption of $3,800.
Beginning in 2013, the exemption is subject to a phase-out that begins with adjusted gross incomes of $250,000 ($300,000 for married couples filing jointly). It phases out completely at $372,500 ($422,500 for married couples filing jointly.)

The standard deduction rises to $6,100 ($12,200 for married couples filing jointly), up from $5,950 ($11,900 for married couples filing jointly) for tax year 2012.

ATRA, extends the current capital gains and dividends rates on income at or below $400,000 (individual filers), $425,000 (heads of households), and $450,000 (married filing jointly) for tax years beginning after December 31, 2012.
For income in excess of $400,000 (individual filers), $425,000 (heads of households) and $450,000 (married filing jointly), the rate for both capital gains and dividends is 20 percent.

Personal exemptions allow a certain amount per person to be exempt from tax. Due to the personal exemption phaseout , the exemptions are phased out for taxpayers with adjusted gross income (AGI) above a certain level.
ATRA, permanently extends the repeal of the personal exemption phaseout on incomes at or Below $250,000 (individual filers), $275,000 (heads of households) and $300,000 (married filing jointly) for tax years beginning after December 31, 2012.
Taxpayers with income above the listed amounts will be subject to the phaseout

Beginning in tax year 2013 (generally for tax returns filed in 2014), a new tax rate of 39.6 percent has been added for individuals whose income exceeds $400,000 ($450,000 for married taxpayers filing a joint return). The other marginal rates of 10, 15, 25, 28, 33 and 35 % remain the same as in prior years.

The healthcare reform law passed in 2010 places new limits on the amount employees can put aside in a flexible spending account . Beginning in 2013, workers will be able to put aside only $2,500 in their flexible spending accounts.
After 2013, that $2,500 FSA limit will be adjusted each year for inflation, but it is still a significant drop from the maximum many employers now allow.
The changes to flexible spending accounts starting in 2013 apply whether you use the plan to cover just you or you and your whole family.
Since the combined out-of-pocket healthcare costs for a family could exceed the $2,500 limit, employees who need to save might want to look at opening a health savings account (HSA), as well as a flexible spending account.
With an HSA, you can put aside money and get a deduction when you do your taxes

The health care legislation enacted in 2013 included a new tax that was designed to affect upper income taxpayers.
The 3.8 percent tax is imposed ONLY on those with more than $200,000 of adjusted gross income (AGI) ($250,000 on a joint return).
The tax applies to investment income, defined as interest, dividends, capital gains and net rents. These items are all included in an individual’s AGI.
The new tax does NOT eliminate the benefits of the $250,000/$500,000 exclusion on the sale of a principal residence. Thus, ONLY that portion of a gain above those thresholds is included in AGI and could be subject to the tax.