2013 Tax Brackets

January 3, 2013

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%


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.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.

*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.


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