The year 2013 will have several new wrinkles for individuals with incomes above $200,000 for single or $250,000 for couples; specifically, higher Medicare payroll taxes and the new Medicare surtax on net investment income. People with MAGI greater than $200,000 for single or $250,000 for couples, may be impacted by a new Medicare surtax (3.8%) on net investment income. Taxpayers with earned income above $200,000 for single or $250,000 for couples, will pay a higher Medicare payroll tax (0.9%).
Year
|
2012
|
2013
|
Top marginal long-term capital gains and qualified dividend rate
|
15%
|
23.8%*
|
Top marginal ordinary income tax rate
|
35%
|
39.6%
|
Top rate on short-term capital gains and non-qualified dividends
|
35%
|
43.4%*
|
Personal exemption phaseout (PEP).
(MAGI above $250,000 for single or $300,000 for married couple filing jointly) |
None
|
Completely eliminates value of personal exemption for single earners with an AGI over $372,501 and couples filing jointly with an AGI greater than $422,501.
|
Pease itemized deduction phaseout.
|
None
|
All itemized deductions reduced by 3% of MAGI over $300,000 for married couples filing jointly ($250,000 for single filers)
to a maximum reduction of 80% in value.
|
*includes 3.8% Medicare surtax
| ||
- Taxable income above $400,000 or $450,000 for couples
In addition to the higher taxes described in the table below, upper-income Americans may be subject to a new 39.6% marginal rate on taxable income over $400,000 for single or $450,000 for married couples filing jointly. Taxpayers may be subject to tax on capital gains and qualified dividends at a rate as high 20% to 23.8% if the Medicare surtax on net investment income applies.
- Source: A taxpayer's guide to 2013
"The 2013 tax changes you can expect, and what you can do about them."
FIDELITY VIEWPOINTS – 02/27/2013
