Higher income taxpayers are going to pay moreThe tax rate of 39.6 percent affects singles whose income exceeds $406,750 ($457,600 for married taxpayers filing a joint return), up from $400,000 and $450,000, respectively. The standard deduction. The standard deduction rises to $6,200 for singles and married persons filing separate returns and $12,400 for married couples filing jointly, up from $6,100 and $12,200, respectively, for tax year 2013. The standard deduction for heads of household rises to $9,100, up from $8,950.
The personal exemption rises to $3,950, up from the 2013 exemption of $3,900. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $254,200 ($305,050 for married couples filing jointly). It phases out completely at $376,700 ($427,550 for married couples filing jointly.)
Net Investment Income Tax (NIIT)
Beginning in 2013, you may be subject to Net Investment Income Tax (NIIT).
The NIIT is 3.8% of the smaller of (a) your net investment income or (b) the excess of your modified adjusted gross income over $200,000 for an individual taxpayer and $250,000 for taxpayers filing as married.
Taxpayers who make over $200,000 ($250,000 for married taxpayers) will be subject to the Medicare surtax of 0.9%.
Saver’s Credit/Retirement contributions credit
Low- and moderate-income workers can take steps now to save for retirement and earn a special tax credit in 2013 and the years ahead
Eligible workers still have time to make qualifying retirement contributions and get the saver’s credit on their 2013 tax return. People have until April 15, 2014, to set up a new individual retirement arrangement or add money to an existing IRA for 2013. Those who missed the opportunity to do elective deferrals (contributions) by the end of the year 2013 to a 401(k) plan or similar workplace program may want to schedule their 2014 contributions soon so their employer can begin withholding them in January.
The maximum saver’s credit is $1,000, $2,000 for married couples.
Other special rules that apply to the saver’s credit include the following:
Eligible taxpayers must be at least 18 years of age.
Anyone claimed as a dependent on someone else’s return cannot take the credit.
A student cannot take the credit. A person enrolled as a full-time student during any part of 5 calendar months during the year is considered a student.
Medical and dental expenses.
Beginning January 1, 2013, you can deduct only the part of your medical and dental expenses that exceed 10% of your adjusted gross income (AGI) (7.5% if either you or your spouse is age 65 or older).
Standard Mileage rates for 2014
Beginning on Jan. 1, 2014, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
* 56 cents per mile for business miles driven
* 23.5 cents per mile driven for medical or moving purposes
* 14 cents per mile driven in service of charitable organizations.
Estates of decedents who die during 2014 have a basic exclusion amount of $5,340,000, up from a total of $5,250,000 for estates of decedents who died in 2013. For more info Call: ‘ 562-865-2727