This Tax Policy Center video explains how your taxes will increase in 2013 if Congress and the President don’t act.
Fiscal Cliff: How Much Would Taxes Rise in 2013? from Urban Institute on Vimeo.
2013 Income Tax Rates Will Go Up
August 13, 2012 By Leave a Comment
If Congress and the President do nothing, income tax rates will go up in a big way in 2013. Here is what it will look like.
Individual Income Tax Rates
| Tax Brackets (2012 Dollar Amounts) | Marginal Rate | ||||
| Unmarried Filers | Married Joint Filers | ||||
| Over | But Not Over | Over | But Not Over | 2012 | 2013 |
| $0 | $8,700 | $0 | $17,400 | 10% | 15% |
| 8,700 | 35,350 | 17,400 | 70,700* | 15% | 15% |
| 35,350 | 85,650 | 70,700* | 142,700 | 25% | 28% |
| 85,650 | 178,650 | 142,700 | 217,450 | 28% | 31% |
| 178,650 | 388,350 | 217,450 | 388,350 | 33% | 36% |
| 388,350 | … | 388,350 | … | 35% | 39.6% |
Long-Term Capital Gain Rates
| Maximum Rates | 2012 | 2013 | 2013 (including Medicare contribution tax) |
| Long-Term Capital Gain | 15% | 20% | 23.8% |
| Qualified 5-Year Capital Gain | 15% | 18% | 21.8% |
Dividend Income Rates
| Maximum Rates | 2012 | 2013 | 2013 (including Medicare contribution tax) |
| Qualified Dividend Income | 15% | 39.6% | 43.4% |
| Ordinary Dividend Income | 35% | 39.6% | 43.4% |
Section 179 Business Asset Expense Deduction
| 2012 | 2013 | |
| Maximum allowable expense | $139,000 | $25,000 |
| Investment ceiling | 560,000 | 200,000 |
Other Withholding Rate Changes
| 2012 | 2013 | |
| Employee portion of FICA payroll taxes | 4.2% | 6.2% |
| Backup withholding rate on reportable payments | 28% | 31% |
| Minimum witholding rate under flat rate method… | ||
| …on supplemental wages up to $1 million | 25% | 28% |
| …on supplemental wages in excess of $1 million | 35% | 39.6% |
| Voluntary withholding rate on unemployment benefits | 10% | 15% |
Tax tables courtesy of Godfrey and Kahn
