Inflation Adjusted Amounts for Tax Year 2013

The IRS recently released some of the inflation adjusted amounts for tax year 2013. The following chart compares some of the common tax provisions to the 2012 tax year inflation adjusted amounts. Tax Provision 2013 2012 IRA contribution limits $5,500 $5,000 IRA contribution limits (age 50 and over) $6,500 $6,000 401(k) elective deferral limits $17,500 $17,000 401(k) elective deferral limits (age 50 and over) $23,000 $22,500 Defined contribution plan contribution limits $51,000 $50,000 SIMPLE contribution limits $12,000 $11,500 SIMPLE contribution limits (age 50 and over) $14,500 $14,000 Annual exclusion for gifts $14,000 $13,000 Maximum taxable Social Security earnings $113,700 $110,100 Social Security earnings limit when under full retirement age $15,120 $14,640 Social Security earnings limit for year of full retirement age $40,080 $38,880 COLA increase for those receiving Social Security benefits 1.7% 3.6% Inflation adjusted amounts for expiring provisions were not included. The IRS announced those amounts will be addressed in future guidance. Congress is not expected to address the expiring tax provision issue until late in the year or early in 2013. Expiring provisions affect 2013 inflation numbers for the following: • Tax rate tables. • Adoption assistance exclusion. • Child tax credit. • Personal exemptions. • Hope and Lifetime Learning Credits. • Section 179 expense deduction. • Earned Income Credit. • Interest deduction on education loans. • The standard deduction. • Unified credit against estate tax. • The overall limitation on itemized deductions. • Qualified transportation fringe benefits.