When all is said and done, what are the actual tax brackets and rates this year? The fiscal cliff compromise bill that passed Congress preserves Bush-era rates for taxpayers making under $400K (single filers)/$450K (joint filers) in taxable income. Last year, we predicted 2013 tax brackets under various scenarios using the IRS's method of adjusting tax brackets for inflation; based on that work, we can confidently say that this year's tax brackets are as follows:
Table: 2013 Tax Rates and Brackets
|
|
Filing Status
|
Taxable Income
|
Rate
|
|
Single
|
$0 to $8,925*:
|
10%
|
|
$8,925* to $36,250:
|
15%
|
|
$36,250 to $87,850:
|
25%
|
|
$87,850 to $183,250:
|
28%
|
|
$183,250 to $398,350:
|
33%
|
|
$398,350 to $400,000:
|
35%
|
|
$400,000+:
|
39.6%
|
|
Joint
|
$0 to $17,850*:
|
10%
|
|
$17,850* to $72,500:
|
15%
|
|
$72,500 to $146,400:
|
25%
|
|
$146,400 to $223,050:
|
28%
|
|
$223,050 to $398,350:
|
33%
|
|
$398,350 to $450,000:
|
35%
|
|
$450,000+:
|
39.6%
|
|
Head of Household
|
$0 to $12,750*:
|
10%
|
|
$12,750* to $48,600:
|
15%
|
|
$48,600 to $125,450:
|
25%
|
|
$125,450 to $203,150:
|
28%
|
|
$203,150 to $398,350:
|
33%
|
|
$398,350 to $425,000:
|
35%
|
|
$425,000+:
|
39.6%
|
We also finally know what the AMT exemption levels are, both for 2012 and 2013. The bill sets the 2012 exemption level at $50,600 for single filers and $78,750 for joint filers and adjusts these amounts for inflation thereafter. In 2013, inflation adjustments will result in an exemption level of $51,900 for single filers and $80,800 for joint filers, according to our calculations.
Edit: The bill also appears to adjust other AMT parameters for inflation as well. The boundary between the 26% and 28% brackets has been $175,000 for decades; it will be so for 2012 as well and adjusted for subsequent years. In 2013 we calculate it to be $179,500. Likewise, the AMT exemption phaseout has, for may years, started at $112,500 for single filers and $150,000 for joint filers - in 2013 it will rise to $115,400 for single filers and $153,900 for joint filers.
*Erratum: Upon closer reading of the relevant statutes, we've determined that our method for adjusting the top of the 10% bracket wasn't using the correct base year. We've fixed our calculation and adjusted the table as of 5:27 PM on January 3rd.
