February 7, 2014
2013 Tax Year in Review
Now that 2013 has come to a close and as we all prepare for 2014, here are important tax developments from last year that are sure to play a role in 2014 and beyond:
- American Taxpayer Relief Act (ATRA) Effective January 1, 2013:
- The Bush-era tax cuts are permanent for low and moderate income taxpayers (AGI under $400k/$450k for single/joint taxpayers).
- Alternative minimum tax (AMT) is permanently patched to prevent encroachment on middle income taxpayers.
- The maximum estate tax rate is 40 percent with a $5 million exclusion (indexed for inflation).
- Affordable Care Act Effective January 1, 2013:
- There are two new taxes on qualified taxpayers (AGI over $200k/$250k for single/joint taxpayers): a 3.8% net investment income surtax and a 0.9% additional Medicare tax.
- Same Sex Marriage On June 26, 2013, the U.S. Supreme Court struck down the Defense of Marriage Act (DOMA). Effective January 1, 2013 (with some retroactive provisions):
- All legally married same-sex couples are married for all federal tax purposes, including income and gift and estate taxes.
- This treatment applies regardless of whether a couple resides in a jurisdiction that recognizes same-sex marriage.
In addition, we have detailed changes from 2013 to 2014 for important items like Flexible Spending Accounts (FSA), Health Savings Accounts (HSA), standard mileage rates and retirement contributions. Please click here to review these items.