How Much Your Taxes Will Rise in 2013?

Uncertain Tax Code

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

Income tax rates

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