Tax Rates: 2012 & 2013
It can sometimes be a bit hard to find the year’s income tax rates (And who really wants to navigate the IRS website anyway?), so here they are for 2012 as much for my sake as for any reader’s. See below for the tax rates for 2012, which are the ones you need to use to file your return between now and April 15th.
NOTE: These are the rates for 2013, and will apply to the return you file in 2014. Do not use them for the return you file this year.
If you look, you’ll see that this year we have six tax brackets, ranging from 10% to 35%. We still have those six brackets for 2013, but with an increase in the limits of 2-3%. What’s really notable is that 2013 includes a seventh bracket at a rate of 39.6%. Ouch!
While that seems like a reasonable step-up at first, take a closer look at that 35% bracket. For Single taxpayers, that bracket is only $1650 wide! In fact, married couples have the widest margin in that bracket with $51,650. What the heck?!? That verges on punitive, especially when you consider that the 33% tax bracket is over $215,000 wide for a Single taxpayer. But where’d it come from?
Well, it’s the result of the “fiscal cliff” debate. Doctors and other well-paid professionals owe the Republicans a big thank-you for what they were able to accomplish, relatively little that it was. The Republicans’ original goal was to set the highest bracket at $1 million+ in income, but negotiations pared that down 60%. By contrast, President Obama and the Democrats wanted to set the bar down at $200,000 or $250,000.
I try not to comment on politics here, but felt I needed to explain where that craziness came from. And, yes, I’ll admit I’m biased. I’m pro-business, after all…something on which the President and I clearly differ. Well, such is life.
Thanks for reading,