Income Tax 2013
2013 Federal Individual Income Tax Rates, Deductions and Exemptions
Tax return due: Tuesday April 15, 2014, unless you file an extension with form 4868by October 15, 2014.
You have to pay federal income tax and on top of that state and local income tax in most states. Your tax bracket depends upon your income and your tax-filing classification.
There are seven federal income tax brackets (ranging from 10% to 39.6%), the brackets per state vary. There are five classifications: Single, Married Filing Jointly, Qualified Widow or Widower, Married Filing Separately, and Head of Household.
2013 Individual Federal Income Brackets and Tax Rates
Jointly or qualifying widow(er)
|10%||$0 - $8,925||$0 - $17,850||$0 - $8,925||$0 - $12,750|
|15%||$8,925 - $36,250||$17,850 - $72,500||$8,925 - $36,250||$12,750 - $48,600|
|25%||$36,250 - $87,850||$72,500 - 146,400||$36,250 - $73,200||$48,600 - 125,450|
|28%||$87,850 - $183,250||$146,400 - $223,050||$73,200 - $111,525||$125,450 - $203,150|
|33%||$183,250 - $398,350||$223,050 - $398,350||$111,525 - $199,175||$203,150 - $398,350|
|35%||$388,350 -$400,000||$398,350 - $450,000||$199,175 - $225.000||$398,350 - $425,000|
|39.6%||$400,000 and more||$450,000 and more||$225,000 and more||$425,000 and more|
How does it work? For example: a single without children pays income tax above a filing threshold (see below) of $10,000. This threshold is - not for 65 or older, qualified widower and if you don't itemize your deductions - the Standard Deduction (see below) of $6,100 plus the Personal Exemption (see below) of $3,900. So, a single would actually pay 0% over the first $10,000 of income. After subtracting this amount from her or his income, the brackets start to work. Over the next $8,925 a single pays 10% tax; 15% over the amount between 8,925 and $36,250 and so on.
2013 Personal Filing Threshold
|Married Filing jointly |
|Head of |
|0 exemptions blind/elderly||$10,000||$20,000||$12,850|
|1 exemption bind/elderly||11,500||$21,200||
|2 exemptions blind/elderly||13,000||$22,400||$15,850|
Deductions: Individual tax payers are allowed a choice when preparing their income tax returns. They can itemize their deductions from a list of allowable items and subtract those itemized deductions (see below) and their personal exemption deductions (see below) from their AGI to get their Taxable Income. Or they can choose to subtract the standard deduction (see below) and their personal exemptions. The choice between standard and itemized deduction depends on:
- a comparison between both types of deductions: what choice gives more money to subtract?
- do you have kept records of the items you want to subtract? - you need them as prove.
- if you are filing as 'Married', Filing separately', and your spouse itemizes, you have to do that to.
2013 Exemptions: for yourself (personal exemption), spouse (if you are married) or your dependents: $3,900 per person.
The personal exemption is not a subject to federal income tax, but it is the minimal amount of money you need to get by at a subsistence level.
Personal exemptions used to be subject to phase-out limits, called the personal exemption phaseout (PEP). The phase-out limits didn't apply for the year 2010, 2011 and 2012. The limitations re-surfaces in 2013:
|Filing status||AGI Beginning Phaseout||AGI Completed Phaseout|
|Married filing jointly||$300,000||$422,500|
|Married filing separately||$150,000||$211,250|
|Head of Household||$275,000||$397,500|
You can take an exemption for yourself - the personal exemption - or for your dependents, but you cannot do that if you can be claimed as a dependent by another taxpayer - even if this taxpayer doesn't actually claim you as a dependent. If you are married you can claim an exemption for your spouse filing Jointly or Separately - only if another taxpayer doesn't claim your spouse as a dependent. You cannot claim a person dependent unless that person is your Qualifying Child or qualifying relative.
You must always list the social security number (SSN) of any dependent for whom you claim an exemption. If you don't list the SSN the exemption could be denied.
2013 Personal Standard Deductions
|Deductions||Single||Married Filing jointly ||Married Filing Separately||Head of Household||Dependents|
|Standard||$6,100||$12,200||$6,100||$8,950||Greater of $1000 or sum of $350 and individual's earned income|
Earned Income Credit (EITC):
|Phaseout (single)||$7,970 -$14,340||$17,530 - $37,870||$17,530 - $43,038||$17,530 - $46,227|
|Phaseout (married filing jointly)||$13,310 - $19,680||$22,870 - $43,210||$22,870 - $46,378||$22,870 - $51,567|
Adoption Credit: the maximum credit is $12,970. Phaseouts apply for taxpayers with a modified adjusted gross income over $194,580. The credit is completely phased out with a adjusted gross income of more than $234,580.
Child Tax Credit: The value used to determine the amount of refundable credit is $3,000.
American Opportunity Credit: limited to $2,500. Phaseouts apply for the credit beginning with a modified adjusted gross income over $80,000 ($160,000 for married couples filing jointly).