What are the most significant tax changes this year?

The most significant tax changes focus on ordinary/ earned income, dividends, capital gains, AMT tax and various exemptions and deductions. See table below.

 

Table:   Overview of tax changes
Item	2011	2012	2013
Alternative   Minimum Tax exemption	$48,450 Single filers   $74,450 Married filing jointly	$33,750 Single $45,000 Married	To be determined
Tax   rate ranges- ordinary income	10%-35%	10%-35%	15%-39.6%
Long-term   capital gains tax rate (top rate)	15%	15%	20%
Qualified   dividends tax rate (top rate)	15%	15%	39.6%
Payroll   tax reduction of two percentage points	Yes	Final Year	Expired
Surtax   of 3.8% on investment income	No surtax	No surtax	Surtax applies to   single taxpayers with modified AGI of more than $200,000; more than $250,000   for joint filers
Increase   in Medicare hospital insurance tax wage base for self-employed	N/A	N/A	0.9% increase in   employee portion of high income wage base of single filers with wages of more   than $200,000; more than $250,000 for joint filers
Phase-out   of personal exemptions and itemized deductions for high income earners	N/A	Final year of   suspended phase-out of personal exemptions and itemized deductions	Reinstatement of   phase-out of personal exemptions and itemized deductions
Marriage   penalty equalization	Expanded deduction for   married joint filers	Expanded deduction for   married joint filers	Expanded deduction   expires
Child   credit	$1,000 per child under   age 17	$1,000 per child under   age 17	$500 per child under   age 17
Child   care deduction	$3,000 limit	$3,000 limit	$2,400 limit
Estate   tax top rate	35%	35%	55%
Estate   tax exemption	$5 million	$5.12 million	$1 million