The tax law requires that certain tax numbers be adjusted for inflation each year. Here are some of the 2013 tax numbers you’ll need to use as you get started with this year’s tax planning.
The standard mileage rate for business driving increases to 56.5 cents per mile for 2013. The rate for medical and moving mileage increases from 23 cents per mile to 24 cents per mile. The general rate for charitable driving remains at 14 cents per mile.
The maximum earnings subject to Social Security tax increases to $113,700. The earnings limit for those under full retirement age is $15,120. For those at full retirement age, there is no earnings limit.
The “nanny tax” threshold remains at $1,800 for 2013. If you pay household workers more than this amount during the year, you’re responsible for payroll taxes.
The “kiddie tax” threshold increases by $100 for 2013. If your child under age 19 (under age 24 for students) has more than $2,000 of unearned income this year (e.g., dividends and interest income), the excess could be taxed at your highest rate.
The maximum individual retirement account (IRA) contribution you can make in 2013 increases to $5,500 if you’re under age 50 and to $6,500 if you are 50 or older.
The maximum amount of wages employees can put into a 401(k) plan increases to $17,500. The 2013 maximum allowed for SIMPLE plans increases to $12,000. If you are 50 or older, you can contribute up to $23,000 to a 401(k) and $14,500 to a SIMPLE plan.
For 2013, the maximum amount that can be contributed to a health savings account (HSA) increases to $3,250 for individuals and $6,450 for families. Those 55 and older can contribute an additional $1,000.
The alternative minimum tax exemption for 2013 is $51,900 for singles and $80,800 for couples filing joint returns.
If you have any questions regarding this information, please contact a certified public accountant.
Barry Gilchrist is a certified public accountant at Wessel & Co. of Johnstown.
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