The IRS released its annual inflation adjustments this week, including tax-rate schedules for 2013 and other tax changes from the American Taxpayer Relief Act of 2012.
— The standard deduction increases from $5,950 to $6,100 for an individual and from $11,900 to $12,200 for married couples filing jointly for the 2012 tax year.
— Starting in the 2013 tax year, there is a new tax rate of 39.6 percent for individuals whose income is more than $400,000 and married taxpayers filing jointly whose income is more than $450,000. The other marginal rates — 10, 15, 25, 28, 33 and 35 percent — are the same.
— The maximum earned income credit amount for taxpayers filing jointly who have three or more children increases from $5,891 in the 2012 tax year to $6,044 in 2013.
— The American Taxpayer Relief Act placed a limit for itemized deductions for the 2013 tax year for individuals with incomes of $250,000 or more, and married couples filing jointly who earn $300,000 or more.
— The personal exemption is $3,900 for the 2013 tax year, up from $3,800 in 2012. Starting in 2013, the exemption is subject to a phase-out that begins with individuals who have adjusted gross incomes of $250,000, and married couples with adjusted gross incomes of $300,000. It phases out completely at $372,500 for individuals and $422,500 for married couples.
— The Alternative Minimum Tax exemption increases from $50,600 for individuals in 2012 to $51,900 in 2013; and from $78,750 to $80,800 for married couples.