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Tax
E-ALERT
November 2013

IRS Releases 2014 Income and Transfer Tax Adjustments

INFLATION-ADJUSTED THRESHOLD AND CEILING INCREASES

The Social Security Administration and the IRS have released their 2014 list of CPI-adjusted items that will affect individual income, payroll and transfer tax calculations for 2014. We have provided you with some of the key provisions in the following grids.

INCOME TAXS

Threshold amounts above which the top regular and alternative minimum tax (AMT) rates apply.

	2014	2013
39.6% bracket threshold: Joint returns / surviving spouses Heads of household Other unmarried individuals Married filing separately Estates and Trusts	Taxable income above: $457,600 $432,200 $406,750 $228,800 $12,150	Taxable income above: $450,000 $425,000 $400,000 $225,000 $11,950
AMT 28% bracket threshold: Joint returns / surviving spouses Other unmarried individuals Married filing separately Estates and Trusts	AMTI above: $182,500 $182,500 $91,250 $182,500	AMTI above: $179,500 $179,500 $89,750 $179,500

Personal exemption, standard deduction and foreign income exclusion amounts:

	2014	2013
Personal exemption amount	$3,950	$3,900
Personal exemption phased-out: Joint returns / surviving spouses Heads of households Other unmarried individuals Married filing separately	Beginning/ending at AGI of: $305,050 / $427,550 $279,650 / $402,150 $254,200 / $ 376,700 $152,525 / $213,775	Beginning/ending at AGI of: $300,000 / $422,500 $275,000 / $397,500 $250,000 / $372,500 $150,000 / $211,250
Standard deduction: Joint returns / surviving spouses Heads of households Other unmarried individuals Married filing separately	$12,400 $9,100 $6,200 $6,200	$12,200 $8,950 $6,100 $6,100
Foreign income exclusion amount	$99,200	$97,600

AMT exemption amounts and the AMT exemption phase-out amounts:

	2014	2013
AMT exemption amounts: Joint returns / surviving spouses Unmarried individuals Married filing separately Estates and Trusts	$82,100 $52,800 $41,050 $23,500	$80,800 $51,900 $40,400 $23,100
AMT exemption phased-out: Joint returns / surviving spouses Other unmarried individuals Married filing separately Estates and Trusts	$156,500 $117,300 $78,250 $78,250	$153,900 $115,400 $76,950 $76,950

PAYROLL TAXES

Employment taxes imposed on wage earners:

2014

2013

Social Security tax wage base:
Wage ceiling amount
Maximum tax (rate = 6.2%)

1.45% Medicare tax wage bracket:
Joint filers
Married separate taxpayers
Other wage-earners

2.35% Medicare tax wage bracket:
Joint filers
Married separate taxpayers
Other wage-earners

$117,000
$7,254.00

First $250,000 of wages
First $125,000 of wages
First $200,000 of wages

Wages above $250,000
Wages above $125,000
Wages above $200,000

$113,700
$7,049.40

First $250,000 of wages
First $125,000 of wages
First $200,000 of wages

Wages above $250,000
Wages above $125,000
Wages above $200,000

Self-employment (SE) taxes:

	2014	2013
Social Security tax wage base: SE income ceiling amount Maximum tax (rate = 12.4%) 2.9% Medicare tax wage bracket: Joint filers Married separate taxpayers Other SE income-earners 3.8% Medicare tax wage bracket: Joint filers Married separate taxpayers Other SE income-earners	$117,000 $14,508.00 First $250,000 of wages First $125,000 of wages First $200,000 of wages Wages above $250,000 Wages above $125,000 Wages above $200,000	$113,700 $14,098.80 First $250,000 of wages First $125,000 of wages First $200,000 of wages Wages above $250,000 Wages above $125,000 Wages above $200,000

TRANSFER TAXES

Estate and gift tax exclusions and valuation limitation:

	2014	2013
Basic estate / gift tax exclusion	$5,340,000	$5,250,000
Generation-skipping tax exclusion	$5,340,000	$5,250,000
Gift tax annual exclusion For gifts to a non-citizen spouse	$14,000 $145,000	$14,000 $143,000
Special use value reduction limit	$1,090,000	$1,070,000

CONTACT

If you have any questions about this alert or would like further information on the recent tax changes, please contact Brian L. Gaudet or Marjorie Suisman,
Donna M. White, or George L. Chimento.

This article is provided as a courtesy and may not be relied upon as legal advice, or to avoid taxes and penalties. Distribution to promote, market, or recommend any arrangement or investment to avoid or evade taxes, including penalties, is expressly forbidden. Any communication with the author as to its contents, does not, of itself, create a lawyer-client relationship. Under the ethical rules applicable to lawyers in some jurisdictions, this may be considered advertising.

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Tax E-ALERTNovember 2013