Tax benefits increased and FATCA implementation delayed in 2013

For tax year 2013, the Internal Revenue Service announced today annual inflation adjustments for more than two dozen tax provisions.

The annual exclusion for gifts rises to $14,000 for 2013, up from $13,000 for 2012.

The amount used to reduce the net unearned income reported on a child’s tax return subject to the “kiddie tax,” is $1,000, up from $950 for 2012.

The foreign earned income exclusion rises to $97,600, up from $95,100 for tax year 2012 and $92,900 for tax year 2011.

Details on these inflation adjustments and others such as the low-income housing credit, the dollar limits for high-deductible health plans and other amounts can be found in Revenue Procedure 2012-41, which will be published in Internal Revenue Bulletin 2012-45 on Nov. 5, 2012.

Also, on October 24, 2012 the IRS issued Announcement 2012-42, which extends the deadlines for complying with certain FATCA deadlines by six to twelve months.

The changes in the FATCA-related deadlines are as follows:

Certification process for new customers: was January 1, 2013; now January 1, 2014

Certification process for existing customers that are intermediaries: was December 31, 2013; now June 30, 2014

Certification process for all other existing customers: was December 31, 2014; now December 31, 2015

CFCs – agreement with IRS: was July 1, 2013; now January 1, 2014

Last Updated November 27, 2012