Changes to tax rates, exemptions, credits and deductions recently occurred in the newly-enacted American Taxpayer Relief Act of 2012.
Some of these are indexed for inflation. Of note, one of these being the recently topical exemption for Alternative Minimum Tax otherwise known as the ‘patch’.
Some of the changes are as follows and are for individual filers with joint filers’ equivalent amounts bracketed.
1. Tax rate increase to 39.6% on income over US $400,000 (US $450,000) effective from 1 January 2013.
2. Increased standard deduction of US $6,100 (US $12,200) for 2012.
3. Limitation on itemized deductions for incomes of US $250,000 ($300,000) or more for the 2013 tax year.
4. Personal exemption increase to US $3,900 per person for 2013 subject to phase-out starting at Adjusted Gross Income of US $150,000 (US $300,000) and completing at US $211,250 ($422,500).
5. Exemption amount for Alternative Minimum Tax (‘the patch’) is US$51,900 (US$80,800) for 2013.
6. Maximum Earned Income Credit for 2012 is US$6,044 joint filers with three or more qualifying children.
7. The exclusion for estates of decedents who die in 2013 is US $5,250,000, up $130,000 from US $5,120,000 in 2012.
8. The amount of employer-provided funding for transit passes and transportation to/from work which can be excluded by an employee is US$245 for 2013 and US$240 for 2012, the 2012 amount was increased from US$125.