Tax Law Changes

New for 2011, 2012 and 2013 is a concept named portability which allows a surviving spouse's estate to use any portion of the exemption amount not used by the other spouse’s estate.
For 2013 the exemption is $5,250.000.

For 2012, the Personal and Dependency Exemptions increased by $100 to $3,800.
in 2013 ATRA, permanently extends the repeal of the personal exemption phase-out on incomes at or below $250,000 (individual filers), $275,000 (heads of households) and $300,000 (married filing jointly).,br> Exemptions will be phased out for taxpayers with adjusted gross income (AGI) above the AGI's mentioned above.

The Annual Gift Exclusion remains at $14,000 per donee.

The Federal Estate tax Unified credit has increased to $5,250,000.

IRA Contributions $5,000
IRA Catch-up Contributions $1,000
Defined Benefit Plan Benefit $200,000
Defined Contribution Plan Allocation $50,000
401(K) or 403(b) Salary reduction deferrals $17,000
401(k) or 403(b) Catch-up Contributions $5,500
SIMPLE plans $11,500
SIMPLE plan Catch-up Contributions $2,500
Salary for pension plan $250,000
Salary for highly compensated employee $115,000
Salary for Key employee $165,000
Salary for SEP eligibility $550
Social Security Taxable Wage base $110,100

For qualified property acquired and placed in service in 2016, a 50% bonus first-year depreciation allowance applies under Code Sec. 168(k).

The Work opportunity tax credit (WOTC) is not available except for hiring qualified veterans. The WOTC under Code Sec. 51 generally can't be claimed for an individual who begins work for the employer after Dec. 31, 2011. However, the WOTC continues to be available for employers that hire qualified veterans who began work for the employer before Jan. 1, 2013.

There is a longer write-off period for certain realty property. For specialized realty assets (qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property) placed in service after 2011, a 39-year (up from 15-year) write-off period generally applies.

American Taxpayer Relief Act (ATRA) increases the exemption amounts for 2012 to $50,600 (individuals), $78,750 (married filing jointly), and $39,375 (married filing separately).
The exemptions continue to phaseout for alternative minimum taxable income over certain amounts. ATRA indexes the exemption and phaseout amounts for years after 2012.
The new law also allows the nonrefundable personal credits to reduce AMT.
Prior to ATRA, AMT exemptions for 2013 were scheduled to be $33,750 (individuals), $45,000 (married filing jointly and surviving spouse), and $22,500 (married filing separately), with nonrefundable personal credits not being allowed to reduce AMT