2013 Income Tax Filers Will Find that Top Tax Rates Have Gone UP

JC Leahy, MA Accounting

2013 filers will find that the top income tax rates have risen from 35% to 39.6%.  The thresholds for this new 39.6% rate begin at $250,000 for married taxpayers filing separately.  For single taxpayers, the threshold is $400,000. For head-of-household, the threshold is $425,000. For married couples filing jointly, the threshold is $450,000.  This structure incorporates a significant marriage penalty.  An unmarried couple can pay the lower tax rate on up to $800,000 of income ($400k plus $400k), while the same couple, if married, would pay the lower rate on only $450,000.