Recently, Americans have been put through a see-saw of news related to 2013 federal income tax rates. As the fiscal cliff approached and the United States was looking at the expiration of Bush era tax cuts, the fate of tax year 2013 federal income tax rates teeter-tottered between a low of 10%-15% to a high of 35%-39.6%.
2013 Federal Income Tax Rates
As of early January 2013, Congress reached a fiscal cliff deal that President Obama could agree to. The bill calls for an extension of the lower Bush era rates for most Americans.
Essentially, 2013 federal income tax rates look the same as 2012 with one exception: Instead of capping at 35% for the highest earners, anyone who earns over $400,000 in 2013 ($450,000 for Married Filing Jointly, and $425,000 for Head of Household), are subject to a higher tax rate of 39.6%.
This doesn’t mean all of their income is taxed at that high amount, only the amount above those thresholds. For a discussion of how tax bracket computations works, see the post “2012 IRS Tax Tables – Federal Income Tax Brackets.”
Newly Announced 2013 Individual Income Tax Rates
2013 IRS Tax Brackets To Be Announced
Keep in mind that although we know the 2013 individual income tax rates at this time, we don’t know all of the inflation adjusted income amounts in order to forecast exact tax liabilities. But at least we now have a general idea of what to expect when it’s time to file our returns in early 2014.
The 2013 IRS tax brackets should be officially announced sometime this year within an IRS Revenue Procedure.