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Dividends and capital gains

Type of income Holding period Top rate for taxpayers in 10% – 15% tax brackets Top rate for taxpayers in 25%, 28%, 33% and 35% tax brackets Top rate for taxpayers in 39.6% tax bracket
Qualified dividends

(See below)

0%

15%

20%

Short-term capital gains

Up to 12 months

Ordinary income rate

Ordinary income rate

Ordinary income rate

Long-term capital gains

More than 12 months

0%

15%

20%

– Until the end of 2012, qualified dividends were taxed at a maximum rate of 15% (0% for taxpayers in the 10% or 15% bracket). – Starting in 2013, qualified dividends will be taxed at 0% for taxpayers in the 10% and 15% tax brackets, 15% for taxpayers in the 25%, 28%, 33%, and 35% tax brackets, and 20% for taxpayers in the 39.6% tax bracket. – Gain on assets held one year or less are taxed at ordinary income rates. – Gains on most capital assets held more than one year are taxed at 0% for taxpayers in the 10% and 15% brackets; 15% for taxpayers in the 25%, 28%, 33%, and 35% brackets, and 20% for taxpayers in the 39.6% tax brackets. – Capital losses are deductible dollar against capital gains. Up to $3,000($1,500 if married filing separately) in net capital losses (either short-term or long-term) may be deducted each year against ordinary income. Net capital loss amounts in excess of $3,000 may be carried over indefinitely. – Beginning in 2013, an additional 3.8% Net Investment Income Tax (NIIT) will be assessed on taxpayers with a modified adjusted gross income (MAGI) exceeding $250,000 for those filing jointly, or surviving spouse, $200,000 for head of household and single, $125,000 for those filing married filing separately, and 200,000 for all other taxpayers. The tax is 3.8% of the lesser of net investment income or the excess of MAGI over the threshold amount. Worthless securities If a security that is a capital asset becomes worthless at any time during the tax year, it is treated as if you sold the security on the last day of the tax year in which the security became worthless. Kiddie tax                                                                                                                                Unearned income (interest, dividends, and capital gains) Among other conditions, the kiddie tax rules apply if: 1) the child is under 18 years of age, 2) the child is 18 years of age and the child’s support cost, or 3) the child is 19 to 23 years of age, the child’s earned income is half or less of the child’s support cost, and this child is a full-time student. Assuming no earned income by the child, the following tax rate schedule will apply.

Unearned income

Tax

<$1,000 No tax
$1,000 – $2,000 Taxed at single taxpayer rate
>$2,000 Taxed at the higher of the parents’ top marginal rate or the child’s tax rate

Parents may elect to report their child’s income on their tax returns: by doing so the child will not be required to file a tax return. Estimated tax payments Due Dates (for calendar year end individuals)

Installment

Due date

First

April 15, 2013

Second

June 17, 2013

Third

September 16, 2013

Fourth

January 15, 2014

2013 maximum monthly Social Security benefit                                                                     This benefit is for an individual who reached full retirement age in 2013 and who earned at least the maximum wage base amount during his or her working years. (Date from the Social Security Administration) Income tax on Social Security benefits Social Security benefits are taxable (up to a maximum of 85%) when provisional income exceeds a certain threshold amount. Provisional income generally includes adjusted gross income, plus tax -exempt interest, plus one-half of Social Security benefits. Provisional income

Filing Status

Up to 50% taxed

Up to 85% taxed

Married / joint

$32,000 – $44,000

Over $44,000

Single

$25,000 – $34,000

Over $34,000

Social Security, Medicare and self-employment

Status

Social Security OASDI

Medicare

Total

Employee

6.20%

1.45%

7.65%

Self-employed

12.40%

2.90%

15.3%

Beginning in 2013, an additional 0.9% Medicare tax will be assessed on wage income over $200,000($250,000 for married couples filing a joint return, $125,000 for married taxpayer filing separately) Wage base for Social Security and self-employment tax                  $113,700 Wage base for Medicare hospital insurance                                      No Maximum

Retirement plan contributions 401(k) and 403(b) plans                                                                                                             Maximum dollar limit for an employee’s salary deferral: $17,500 Catch-up contribution limit (age 50 and over): $ 5,500 Maximum annual contribution to a Defined Contribution Plan: $51,000 Simple IRA                                                                                                                                     Maximum dollar limit for an employee’s salary deferral: $12,000

SEP IRA                                                                                                                                   Maximum employer contribution for 2013: Lesser of $51,000 or 25% of compensation up to $255,000 For self-employed individuals, the 25% maximum deductible contribution amount equals 20% of the amount of net earnings from self-employment that remains after subtracting one-half of the self-employment tax paid. Individual Retirement Accounts (IRAs)

Traditional IRA Roth IRA

Qualifications

Individual or spouse must have earned income and must not be 70 1/2 by the end of the year Individual or spouse must have earned income. May be any age.

Maximum Contribution to all IRAs and Roth IRAs

$5,500

$ 5,500

Catch-up Contribution limit (age 50 or over)

$1,000

$1,000

2013 income tax rate schedule – individuals Married filing jointly or qualifying widow(er)

Taxable income is: Pay Plus % on excess Of the Amount over
Over But not over

$0

$17,850

$0

10%

$0

17,850

72,500

1,785.00

15

17,850

72,500

146,400

9,982.50

25

72,500

146,400

223,050

28,457.50

28

146,400

223,050

398,350

49,919.50

33

223,050

398,350

450,000

107,768.50

35

398,350

450,000

125,846.00

39.6

450,000

Single

Taxable income is: Pay Plus % on excess Of the Amount over
Over But not over

$0

$8,925

$0

10%

$0

8,925

36,250

892.50

15

8,925

36,250

87,850

4,991.25

25

36,250

87,850

183,250

17,891.25

28

87,850

183,250

398,350

44,603.25

33

183,250

398,350

400,000

115,586.25

35

398,350

400,000

116,163.75

39.6

400,000

Head of household

Taxable income is: Pay Plus % on excess Of the Amount over
Over But not over

$0

$12,750

$0

10%

$0

12,750

48,600

1,275.00

15

12,750

48,600

125,450

6,652.50

25

48,600

125,450

203,150

25,865.00

28

125,450

203,150

398,350

47,621.00

33

203,150

398,350

425,000

112,037.00

35

398,350

425,000

121,364.50

39.6

425,000

Married filing jointly

Taxable income is: Pay Plus % on excess Of the Amount over
Over But not over

$0

$8,925

$0

10%

$0

8,925

36,250

892.50

15

8,925

36,250

73,200

4,991.25

25

36,250

73,200

111,525

14,288.75

28

73,200

111,525

199,175

24,959.75

33

111,525

199,175

225,000

53,884.25

35

199,175

225,000

62,923.00

39.6

225,000

Standard deduction

Married filing Jointly Single Head of Household Married filing Jointly Surviving Spouse

$12,200

$6,100

$8,950

$6,100

$12,200

2013 personal exemptions Personal and dependency exemptions 2013 exemption amount: $3,900 Starting in 2013, the Personal Exemption Phase-out (PEP) will be reinstated for taxpayers earning more than the threshold amounts. For every $2,500 of AGI over the threshold, personal exemptions will be reduced by 2%.

Married filing jointly and surviving spouse $300,000
Head of household $275,000
Single $250,000
Married filing separately $150,000

2013 itemized deductions Starting in 2013, the Pease limitation, which will limit the amount of itemized deductions over certain income thresholds, will be reinstated for taxpayers earning more than the threshold amounts. The threshold is set at $300,000 for joint filers, and $250,000 for individuals. Itemized deductions are phased-out by 3% of the amount adjusted gross income (AGI) exceeds a specific threshold. Deductions cannot be reduced by more than 80%.

 

2013 standard mileage rates

Standard mileage rates

2012

2013

Business

$0.555

$0.565

Medical and moving

$0.230

$0.240

Charitable

$0.140

$0.140

2013 trust and estate income tax rates

Taxable income is:

Pay

Plus % on excess

Of the Amount over

Over But not over

$0

$2,450

$0

15%

$0

2,450

5,700

367.50

25

2,450

5,700

8,750

1,180.00

28

5,700

8,750

11,950

2,034.00

33

8,750

11,950

3,090.00

39.6

11,950

Certain education and health items for 2013

American opportunity tax credit (AOTC) for higher education expenses – Maximum credit amount is $2,500 per eligible student per year – Phased-out at modified AGI between $80,000 and $90,000 (between $160,000 and $180,000 for joint filers) – Credit is extended through 2017
Qualified tuition deduction In prior years, the maximum deduction was: – $4,000 for an individual whose modified AGI doesn’t exceed $65,000 ($130,000 for a joint return), – $2,000 for an individual whose modified AGI exceeds $65,000 ($130,000 for a joint return), but doesn’t exceed $80,000 ($160,000 for a joint return), or – $0 for other taxpayers. This law has been extended through the end of 2013.
Interest paid on qualified higher education loans – The maximum deductible amount of $2,500 phases out ratably for single taxpayers with modified AGIs between $60,000 and $75,000 ($125,000 and $155,000 for joint returns.)
Health Savings Accounts (HSAs) – The maximum annual HSA contribution amounts are $3,250 for individuals with single coverage and $6,450 for individuals with family coverage.

2013 estate and gift tax exemption and credit

Exemption amount

Tax credit

Transfer by lifetime gift

$ 5,250,000

$ 2,045,800

Transfer via estate at death

$ 5,250,000

$ 2,045,800

The credit offsets estate or gift tax liability incurred during one’s lifetime and at death. The exemption amount represents the dollar amount of assets that would result in an estate or gift tax equal to that of the credit amount. 2013 annual exclusion for gifts                                                                                                   The first $14,000 ($28,000 if married and gift splitting elected) of gifts to any person (other than   gifts of future interests in property) is not included in the total amount of taxable gifts made during the year.                                                                                                                                 – The first $ 143,000 of gifts to a spouse who is not a citizen of the U.S. is not included in the total amount of taxable gifts made during the year. – Recipients of gifts from certain foreign persons may be required to report these gifts if the aggregate value of gifts received in a taxable year exceeds $ 15,102.

Additional 2013 extenders Work Opportunity Tax Credit Work Opportunity Tax Credit (WOTC) has been retroactively extended to apply to all individuals who begin work for an employer through December 31, 2013. The credit is available on an elective basis to employers who hire qualified veterans, or individuals that belong to other targeted groups. The credit ranges from $ 2,400 – $ 9,600 depending on the employee hired. Section 179 Expenses The 2012 Taxpayer Relief Act amends Section 179 qualified expenses and extends the $500,000 limitation and $ 2,000,000 phaseout amount to apply to tax years beginning in 2012 and 2013. For qualified real property that is purchased new in 2013, up to 500,000 can be written off in the year purchased. Qualified real property with a purchase price over $ 2,000,000 will result in the $ 500,000 write-off being phased out dollar-for-dollar amounts over $ 2000,000. 50% Special Bonus Depreciation The 2012 Taxpayer Relief Act extends the opportunity to take 50% bonus depreciation for qualified property placed in service before January 1, 2014(January 1, 2015 for aircraft and long-production-period property). Non Business Energy Property Tax Credit The nonbusiness energy property tax credit has been retroactively approved for 2012, and extended through the end of 2013. With this credit, taxpayers can claim a 10% credit on the cost of qualified energy efficient improvements and expenses. This credit has a lifetime credit of $500, so all credits taken from 2006 forward must be considered when taking this credit.

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Prepared by J. SUNG ACCOUNTANCY CORP.

2013 Federal Tax Rates

TAX RATE SINGLE JOINT* HEAD OF HOUSEHOLD
10% $ 0  – 8,925 $1 – 17,850 $0 – 12,750
15% 8,925 –  36,250 17,850 – 72,500 12,750 – 48,600
25% 36,250 – 87,850 72,500 – 146,400 48,600 – 125,450
28% 87,850 – 183, 250 146,400 – 223,050 125,450 – 203,150
33% 183, 250 – 398,350 223,050 – 398,350 203,150 – 398,350
35% 398,350 – 400,000 Over398,350 – 450,000 398,350 – 425,000
39.6% Over 400,000 Over 450,000 Over 425,000

 

2013 Standard Deduction & Personal Exemptions

TAX RATE SINGLE JOINT* HEAD OF HOUSEHOLD
Standard Deduction $6,100 $12,200 $8,950
  • Personal Exemption : $,3,900

Adoption Credit  Maximum credit is $12,970 and phase out rule is applied.

Child Tax Credit The value under § 24 (d)(1)(B)(i) determines the amount of refundable credit is $3,000.

American Opportunity Credit Hope scholarship credit will be limited to $2,500. Phase out rule is applied.

2013 개인 소득 세율

TAX RATE SINGLE JOINT* HEAD OF HOUSEHOLD
10% $ 0  – 8,925 $1 – 17,850 $0 – 12,750
15% 8,925 –  36,250 17,850 – 72,500 12,750 – 48,600
25% 36,250 – 87,850 72,500 – 146,400 48,600 – 125,450
28% 87,850 – 183, 250 146,400 – 223,050 125,450 – 203,150
33% 183, 250 – 398,350 223,050 – 398,350 203,150 – 398,350
35% 398,350 – 400,000 Over398,350 – 450,000 398,350 – 425,000
39.6% Over 400,000 Over 450,000 Over 425,000

 

2013  표준 공제 인적공제

TAX RATE SINGLE JOINT* HEAD OF HOUSEHOLD
 표준공제 $6,100 $12,200 $8,950
  • 인적공제: $,3,900