Daily Tax Update - October 18, 2012: IRS Announces 2013 Pension Plan Limitations

IRS ANNOUNCES 2013 PENSION PLAN LIMITATIONS:  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 in 2012.

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 Rev. Proc. 2012-41, which will be published in Internal Revenue Bulletin 2012-45 on Nov. 5, 2012.


Notice 2012-2: This notice provides interim guidance to payment settlement entities (as defined in §1.6050W-1(a)(4)(i)) (PSEs) that are United States payors or United States middlemen (each as defined in §1.6049-5(c)(5)) (U.S. payors) regarding the circumstances under which the return of information required under §1.6050W-1(a)(1) is required with respect to a payment to an account maintained outside the United States.  This notice supplements, but does not modify or supersede, the guidance provided in Notice 2011-71, 2011-2 C.B. 233. The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) intend to amend the regulations under section 6050W to reflect the guidance provided in this notice and Notice 2011-71. PSEs may rely on the interim guidance in this notice until the regulations are amended.

Rev. Rul. 2012-30:  This revenue ruling provides various prescribed rates for federal income tax purposes for November 2012 (the current month). 

As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

Steptoe & Johnson LLP has one of the largest and most diverse law firm tax practices in the country.  The practice covers the entire spectrum of federal taxation, including representation of businesses before the Congress, Treasury and the national office of the IRS; transactional planning for domestic and multinational corporations; complex audit and controversy work for corporations and other business interests contesting IRS adjustments; litigation before the Tax Court, Court of Federal Claims, district courts, courts of appeals and the Supreme Court.  The firm's tax practice also encompasses all aspects of employee benefits (ERISA), executive compensation, tax-exempt organizations and charitable giving.  Steptoe has an extensive state and local tax practice, representing an array of business clients on complex sales and use tax, corporate income tax and property tax matters, both advising those clients and handling audits, administrative appeals, and litigation for them. Read more information on Steptoe's tax practice.