Source: https://www.ilpayrollsolutions.com/services/blog/23-2013-the-american-taxpayer-relief-act
Timestamp: 2019-04-26 02:23:51+00:00

Document:
All of the individual income tax rates remain the same, except there is a new top rate of 39.6% on taxable income over $400,000 for single filers, $425,000 for head-of-household filers, and $450,000 for married taxpayers filing jointly ($225,000 for each married spouse filing separately).
The threshold for the itemized deduction for unreimbursed medical expenses has increased from 7.5% of AGI to 10% of AGI for regular income tax purposes. This is effective for all individuals, except, in the years 2013–2016, if either the taxpayer or the taxpayer’s spouse has turned 65 before the end of the tax year, the increased threshold does not apply and the threshold remains at 7.5% of AGI.
Taxpayers earning more than $400,000 ($450,000 for joint filers) will now pay a 20% tax on capital gains and dividends, while those earning less continue to enjoy the 15% rate. Lower income earners in the 10% and 15% tax brackets will enjoy a favorable 0% rate. With the new 3.8% Medicare surtax, the maximum rate will effectively be 23.8% for many higher-income payers.
The Act retains the $5 million estate and gift tax exemption, which will be indexed for inflation. The maximum transfer tax rate was increased from 35% to 40%. The estate tax “portability” election, under which, if an election is made, the surviving spouse’s exemption amount is increased by the deceased spouse’s unused exemption amount, was made permanent by the Act. Overall, this is great news compared to the dramatic reduction in the exemption amount that would have taken place under prior law.
i. Marriage penalty relief (i.e., the increased size of the 15% rate bracket (IRC § 1(f)(8)) and increased standard deduction for married taxpayers filing jointly (IRC § 63(c)(2)).
ii. The liberalized child and dependent care credit rules (allowing the credit to be calculated based on up to $3,000 of expenses for one dependent or up to $6,000 for more than one) (IRC § 21).
iii. The enhanced rules for student loan deductions introduced by EGTRRA (IRC § 221).
iv. Special rates for accumulated earnings tax and personal holding company tax (IRC §§ 531 and 541).
i. The American opportunity tax credit for qualified tuition and other expenses of higher education was extended through 2018. Other credits and items from the American Recovery and Reinvestment Act of 2009, P.L. 111-5, that were extended for the same five-year period include enhanced provisions of the child tax credit under IRC § 24(d) and the earned income tax credit under IRC § 32(b).
· Above-the-line deduction for qualified tuition and related expenses (IRC § 222).
· Fifteen-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements (IRC § 168(e)).

References: § 1
 § 63
 § 21
 § 221
 § 24
 § 32
 § 222
 § 168