Taxes: How Much Money will Uncle Sam get from you in 2013?

I get  confused when it comes income taxes. So, when someone makes it easy for me to understand tax changes, he or she becomes a friend for life.

Bill Smothermon of Brosowske Mares Smothermon & Co. sent out a great tax newsletter that helped clarify the new tax guidelines. I thought I would share with you a table that breaks down some key changes that will impact your tax returns next year so that you can start planning now.

If you have questions about the guidelines or need help with your tax planning, don’t call me…call Bill at 972-392-2727. Tell him Dawn Redmond sent you!
Key 2013 Tax Information

Item 2013 2012 Change
Maximum income tax rate 39.6% 35.0% +4.5%
Maximum Medicare tax rate 2.35% 1.45% +0.9%
Social Security employee rate 6.2% 4.2% +2.0%
Max Dividend/Capital Gain rate 20% 15% +5.0%
Personal Exemption $3,900 $3,800 +$100
Standard Deductions
Single $6,100 $5,950 +$150
Joint or Qualifying Widow 12,200 11,900 +$300
Head of Household 8,950 8,700 +$250
Married Filing Separate 6,100 5,950 +$150
Elderly/Blind: Married Add $1,200 Add $1,150 +$50
Elderly/Blind: Unmarried Add $1,500 Add $1,450 +$50
Key Credits
Child Tax Credit $1,000 $1,000
Adoption Credit $12,970 $12,650 +$320
Lifetime Learning Credit $2,000 $2,000
American Opportunity Credit $2,500 $2,500
Savers Credit $1,000 $1,000
Retirement Plan Contributions
Traditional IRA $5,500 $5,000 +$500
(age 50+ catchup) Add $1,000 Add $1,000
Roth IRA $5,500 $5,000 +$500
(age 50+ catchup) Add $1,000 Add $1,000
401(k), 403(b), 457 & SARSEP 17,500 17,000 +$500
(age 50+ catchup) Add $5,500 Add $5,500
SIMPLE IRA $12,000 $11,500 +$500
(age 50+ catchup) Add $2,500 Add $2,500
Mileage Rates
Business 56.5¢/mile 55.5¢/mile +1¢
Medical/Moving 24.0¢/mile 23.0¢/mile +1¢
Charitable 14.0¢/mile 14.0¢/mile
Section 179 $500,000 $500,000
Property limit $2 million $2 million
Other Information
Tuition and Fees Deduction $2,000 $2,000
Medical Itemized Deduction AGI Threshold
(7.5% in 2013 for 65 and older) 10.0% 7.5% +2.5%

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