This blog post lists some of the Annual Inflation Adjustments published by the IRS today that are interesting not only to CPAs and tax attorneys. It may be helpful to understand that the 2012 “tax year” was last year (for taxes filed in 2013). But the 2012 tax season is right now (well, actually between January 30th and April 15th 2013). So, we will not be required to file for tax year 2013 until the 2014 tax season. The terminology gets a little confusing.
Adjustments for Tax Year 2012:
- standard deduction increased to $6,100 (was $5,950)
- personal exemption increased to $3,900 (was $3,800)
- maximum Earned Income Credit amount increased to $6,044 (was $5,891)
Adjustments for Tax Year 2013:
- new tax rate of 39.6 percent added for individuals whose income exceeds $400,000
- personal exemption subject to a phase-out that begins with adjusted gross incomes of $150,000
- the Alternative Minimum Tax exemption amount for tax year 2013 is $51,900 (was $50,600)
Make note of these changes because lawmakers may one day be purging the tax code of all deductions, exemptions, credits, and anything else that resembles tax relief.