Federal Tax Law Updates
Here's what's new for 2013:
- Alternative Minimum Tax (AMT) exemption amounts increased:
- For single or head of household -- $51,900
- For married filing jointly or qualifying widow(er) -- $80,800
- $39,375 For married filing separately -- $30,400
- IRA deduction expanded -- You might be able to claim a deduction if both of these apply:
- You were covered by a retirement plan.
- Your income was less than $69,000 -- or $115,000 for married filing jointly or qualifying widow(er)
Your spouse might have been covered by a retirement plan but you weren't. If so, you might be able to claim a deduction if your income was less than $188,000.
- Current standard mileage rates:
- 56.5 cents a mile for business use of a vehicle
- 24 cents a mile for medical care
- Earned Income Credit (EIC) maximum income changes are:
- Three or more children lived with you and you earned less than $46,227 -- or $51,567 if married filing jointly
- Two children lived with you and you earned less than $43,038 -- or $47,162 if married filing jointly
- One child lived with you and you earned less than $37,870 -- or $42,130 if married filing jointly
- No children lived with you and you earned less than $14,340 -- or $19,190 if married filing jointly
- The maximum investment income you can earn and still get the EIC increased to $3,300 .
- Divorced or separated parents: Noncustodial parents can't attach part of the divorce decree anymore. You must attach Form 8332 or a similar document. The document must have all the same information as a Form 8332 that is signed by the custodial parent. This is so the noncustodial parent is allowed the dependency exemption.
- Definition of a qualifying child changes:
- The child must be younger than you, or permanently and totally disabled.
- If the parents could claim the child but don't, anyone trying to claim the child must have a higher AGI than either parent.
- If you don't claim an exemption for your child, you can't claim the child tax credit for them.
- Elective salary deferrals:
- No exceptions -- maximum amount is $17,000
- SIMPLE plans only -- maximum amount is $11,500
- 403(b) plans and qualify for the 15-year rule -- maximum amount is $20,500
- Catch-up contributions for taxpayers age 50 or over has increased to $5,500. Exceptions include for Section 401(k)(11) and SIMPLE plans