YEAR END CHANGES
As we approach the end of the year there are many tax law changes that you should be aware of. Many of the changes are still not solidified but there are quite a few that are for certain to take affect January 1, 2013. The following are some that may be of interest to you and your tax situation.
Additional Medicare Tax
For single taxpayers that have adjusted gross income over $200,000 and married taxpayers having adjusted gross income over $250,000 they will subject to additional medicare tax of .9%. For W-2 wage earners this tax will be deducted from the employee’s paycheck. For self-employed taxpayers this tax will be assessed on the tax return.
Investment Tax
For single taxpayers that have adjusted gross income over $200,000 and married taxpayers having adjusted gross income over $250,000 they will subject to an investment tax of 3% on investment income that exceeds these thresholds. The tax will be calculated based on the lesser of the taxpayer’s investment income or the amount of the taxpayer’s adjusted gross income that exceeds the threshold amount.
Increase in Mileage Rates
There will be an increase in mileage rates for business, medical, and moving. Business mileage rate will be increasing to 56.5 cents p/mile. Medical rate and moving rate will increase to 24 cents p/mile.
Increase in Personal Exemption Deduction and Standard Deduction
The personal exemption deduction for 2013 will be $3,900. The standard deduction will be as follows:
- Single – $6,050
- Married Filing Joint – $12,100
- Head of Household – $8,900
- Married filing separate – $6,050