The IRS just released Revenue Procedure 2013-35 last week updating all of the income tax items that are affected by inflation. Each year right after September 30 the IRS will release these items updated to reflect the annual inflation rate for the year ended September 30. The government is on a fiscal year that ends on that date, so inflation is based on that period, not the calendar year.
The release is 22 pages long and this post will highlight the major changes pertinent to farmers:
- The top income tax rate of 39.6% is now schedule to begin at $457,600 for married couples and $406,750 for singles. For singles, the 35% tax bracket begins at $405,100 and ends at $406,750.
- The AMT exemption amount increases to $52,800 for singles and $82,100 for married couples.
- The standard deduction is $6,200 for singles and twice that or $12,400 for married couples.
- Phase-out of itemized deductions and personal exemptions now begins at $305,050 for married couples and $254,200 for singles.
- The lifetime exemption for gifts/estates is now $5,340,000.
- The maximum amount available for reduction under the Special Use valuations rules of Section 2032A is now $1,090,000.
All of these inflation amounts are applicable with 2014 returns and/or dates beginning January 1, 2014.