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Arizona Society of Enrolled Agents
Frequently Asked Questions about taxes
Do I need to file a return?
What is my personal exemption?
What is the standard deduction?
What is my tax bracket?
How much can I deduct for mileage?
How much can I contribute to my retirement plan?
How much are the gift and estate tax exemptions?
Updated 11/26/2013

Do I need to file a return?

To taxpayers who have faithfully filed tax returns for years, it may be surprising to find that they may not have to file. Generally, you do not need to file a tax return if your income is under these amounts:

    2013 Filing Status Federal Arizona resident
    Under age 65 65 or older Under 65 No tax*
    Single $10,050 $11,500 $5,500 $7,045
    Head of Household $12,900 $14,350 $5,500 $12,083
    Married filing jointly $20,100 $22,400 $11,000 $14,183
    Married filing separately $3,950 $5,100 $5,500 $7,045
    Widow(er) with qualifying dependent $20,100 $21,550 -- --

However... you must file a return if you had self-employment income of $400 or more.

Or, you should file if someone else (like your parents) could claim you as a dependent and you earned over $900 or had investment income (interest on savings, stock dividends, etc.) of more than $300.

Also, you should file a return even if your income is under these limits if you:

  • Had withholding on wages, pensions, retirement distributions or investment accounts.
  • Are eligible for an earned income credit or other credit.
The federal Form 1040 actually collects several other taxes including:
  • Self employment (Social Security and Medicare) tax
  • Social Security and Medicare tax on tip income
  • Early withdrawal tax on IRA's and retirement plans
  • Alternative minimum tax
  • Household employee payroll tax ("nanny tax")

You may be required to file a state return even if you don't have to file a federal one. There are other circumstances where you might be required to file, or it might be beneficial to file, so check with an Enrolled Agent to be sure.

*These figures include the personal exemption and standard deduction. Even though there is generally no tax up to this amount, taxpayers must still file a return if their Arizona incomes are above the "no filing" amount.

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Personal exemptions

Personal exemptions for 2012 are $3,800 per person. You are entitled to claim one exemption apiece for yourself, your spouse if married, and each dependent you can claim. If someone else (such as your parent) claims you as a dependent, you cannot take an exemption for yourself.

In Arizona, personal exemptions are figured differently. A single person or a married person filing separately gets a personal exemption of $2,100. A married couple filing jointly or a single head of household has a personal exemption of $4,200. Dependent exemptions are $2,300 per person.

Filing Status 2014 2013 2012 2011
Federal Arizona AZ dependent Federal Arizona AZ dependent Federal Arizona AZ dependent Federal Arizona AZ dependent
Single $3,950 $2,100 $2,300 $3,900 $2,100 $2,300 $3,800 $2,100 $2,300 $3,700 $2,100 $2,300
Head of Household $3,950 $2,100 $2,300 $3,900 $2,100 $2,300 $3,800 $2,100 $2,300 $3,700 $2,100 $2,300
Married filing jointly $7,900 $4,200 $2,300 $7,800 $4,200 $2,300 $7,600 $4,200 $2,300 $7,400 $4,200 $2,300
Married filing separately $3,950 $2,100 $2,300 $3,900 $2,100 $2,300 $3,800 $2,100 $2,300 $3,700 $2,100 $2,300
Widow(er) with qualifying dependent $3,950 $2,100 $2,300 $3,900 $2,100 $2,300 $3,800 $2,100 $2,300 $3,700 $2,100 $2,300

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Standard deductions

The IRS excludes from your taxable income a specified amount of expenses, called a "standard deduction." If your actual expenses in the allowed categories total more than the standard deduction amount, you may deduct those actual expenses, which is called "itemizing." If your itemized deductions are less than the standard amount, you are better off to use the standard deduction.

      2014 Filing Status Federal Over 65 Arizona
      Single $6,200 $7,650 TBA #
      Head of Household $9,100 $10,550 TBA #
      Married filing jointly $12,400 $14,700 TBA #
      Married filing separately $6,200* $7,350* TBA #
      Widow(er) with qualifying dependent $12,400 $13,850 --
      Dependent of someone else $650/$950 $650/$950 @ $2,100

      * Only if spouse does not itemize; otherwise $0
      # Amounts are indexed annually; Arizona has not yet released annual adjustments
      @ Standard deduction for dependents is $650, unless earned income (not investments) more than $650

      2013 Filing Status Federal Over 65 Arizona
      Single $6,100 $7,550 $4,945
      Head of Household $8,950 $10,400 $9,983
      Married filing jointly $12,200 $14,500 $9,983
      Married filing separately $6,100* $7,250* $4,945
      Widow(er) with qualifying dependent $12,200 $13,650 --
      Dependent of someone else $650/$950 $650/$950 @ $2,100

      * Only if spouse does not itemize; otherwise $0
      # Amounts are indexed annually; Arizona has not yet released annual adjustments
      @ Standard deduction for dependents is $650, unless earned income (not investments) more than $650
      Age 65 adds to standard deduction: $1,450 single/HOH, $2,300 MFJ, $1,150 MFS

      2012 Filing Status Federal Over 65 Arizona
      Single $5,950 $7,400 $4,833
      Head of Household $8,700 $10,150 $9,665
      Married filing jointly $11,900 $14,200 $9,665
      Married filing separately $5,950* $7,100* $4,833
      Widow(er) with qualifying dependent $11,900 $12,750 --
      Dependent of someone else $650/$950 $650/$950 @ $2,100

      * Only if spouse does not itemize; otherwise $0
      # Amounts are indexed annually; Arizona has not yet released annual adjustments
      @ Standard deduction for dependents is $650, unless earned income (not investments) more than $650

      2011 Filing Status Federal Over 65 Arizona
      Single $5,800 $7,250 $4,703
      Head of Household $8,500 $9,950 $9,406
      Married filing jointly $11,600 $13,900 $9,406
      Married filing separately $5,800* $6,950* $4,703
      Widow(er) with qualifying dependent $11,600 $12,750 --
      Dependent of someone else $650/$950 $650/$950 $2,100

      * Only if spouse does not itemize; otherwise $0
      @ Standard deduction for dependents is $650, unless earned income (not investments) more than $650

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    Tax brackets

    Income tax is based on your income after personal exemptions, standard or itemized deductions, and other adjustments are subtracted. A tax bracket is the rate at which the top of your income is taxed, but not all of it. Someone in a 28 percent tax bracket has part of their income taxed at 10 percent and part at 25 percent, with only the highest portion at 28 percent. The tax bracket tells you how much you will have to pay in federal income tax on each additional dollar you make.

      2014
      Federal
      Tax bracket
      Single HOH MFJ or QW MFS Trust
      For income over...
      10% $0 $0 $0 $0 N/A
      15% $9,075 $12,950 $18,150 $9,075 $0
      25% $36,900 $49,400 $73,800 $36,900 $2,500
      28% $89,350 $127,550 $148,850 $74,425 $5,800
      33% $186,350 $206,600 $226,850 $113,425 $8,900
      35% $405,100 $405,100 $405,100 $202,550 N/A
      39.6% $406,750 $432,200 $457,600 $228,800 $12,150

      2013
      Federal
      Tax bracket
      Single HOH MFJ or QW MFS Trust
      For income over...
      10% $0 $0 $0 $0 N/A
      15% $8,925 $12,750 $17,850 $8,925 $0
      25% $36,250 $48,600 $72,500 $36,250 $TBA
      28% $87,850 $125,450 $146,400 $73,200 $TBA
      33% $183,250 $203,150 $223,050 $111,525 $TBA
      35% $398,350 $398,350 $398,350 $199,175 $TBA
      39.6% $400,000 $425,000 $450,000 $225,000 $TBA

      2012
      Federal
      Tax bracket
      Single HOH MFJ or QW MFS Trust
      For income over...
      10% $0 $0 $0 $0 N/A
      15% $8,700 $12,400 $17,400 $8,700 $0
      25% $35,350 $47,350 $70,700 $35,350 $2,400
      28% $85,650 $122,300 $142,700 $71,350 $5,600
      33% $178,650 $198,050 $227,450 $108,725 $8,500
      35% $388,350 $388,350 $388,350 $194,175 $11,650

      2011
      Federal
      Tax bracket
      Single HOH MFJ or QW MFS Trust
      For income over...
      10% $0 $0 $0 $0 N/A
      15% $8,500 $12,150 $17,000 $8,500 $0
      25% $34,500 $46,250 $69,000 $34,500 $2,300
      28% $83,600 $119,400 $139,350 $69,675 $5,450
      33% $174,400 $193,350 $212,300 $106,150 $8,300
      35% $379,150 $379,150 $379,150 $189,575 $11,350

      Arizona Tax bracket
      Status Income over 2013 2012
      Single or MFS $0 2.59% 2.59%
      $10,000 2.88% 2.88%
      $25,000 3.36% 3.36%
      $50,000 4.24% 4.24%
      $150,000 4.54% 4.54%
      MFJ or HOH $0 2.59% 2.59%
      $20,000 2.88% 2.88%
      $50,000 3.36% 3.36%
      $100,000 4.24% 4.24%
      $300,000 4.54% 4.54%

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Mileage rates

Standard mileage rates may be used as an alternative to deducting actual expenses. The standard mileage rate must be claimed the first year a vehicle is used for deductible purposes; you cannot change to it once you have started claiming actual expenses. To deduct either mileage or actual expenses, you must have a written record for each trip showing:

  • Date
  • Miles driven
  • Where to
  • Business purpose
  • Use 2014 2013 2012
    Business 56 ¢ 56½ ¢ 55½ ¢
    Medical 23½ ¢ 24 ¢ 23 ¢
    Moving 23½ ¢ 24 ¢ 23 ¢
    Charitable 14 ¢ 14 ¢ 14 ¢

    Retirement plan limits

    Taxpayers age 50 and older may contribute a higher amount to retirement plans to "catch up," regardless of whether or they had contributed the maximum amounts earlier in life.

    Year IRA & Roth 401(k) & 403(b) SIMPLE SEP
    25% of compensation
    Under age 50 Catchup Under age 50 Catchup Under age 50 Catchup
    2014 $5,500 $6,500 $17,500 $23,000 $12,000 $14,500 $52,000
    2013 $5,500 $6,500 $17,500 $23,000 $12,000 $14,500 $51,000
    2012 $5,000 $6,000 $17,000 $22,500 $11,500 $14,000 $50,000

    Social Security 2014 2013 2012 2011
    Medicare Part B premium $104.90/mo
    $1,258.80/yr
    $104.90/mo
    $1,258.80/yr
    $99.90/mo
    $1,198.80/yr
    $96.40/mo
    $1,156.80/yr
    Maximum earnings taxable
    by Social Security
    $117,000 $113,700 $110,100 $106,800
    Birth year to turn full retirement age (FRA) this year 1948 1947 1946 1945
    Maximum earnings before FRA $15,480
    ($1,290/mo)
    $15,120
    ($1,260/mo)
    $14,640
    ($1,220/mo.)
    $14,160
    ($1,180/mo.)
    Maximum earnings for
    turning FRA this year
    $41,400
    ($3,450/mo)
    $40,080
    ($3,340/mo)
    $38,880
    ($3,240/mo.)
    $37,680
    ($3,140/mo.)
    Social Security website www.SocialSecurity.gov

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    Estate and gift tax exemption

    Your estate will have to pay taxes if its net value when you die is more than the "exempt" amount set by Congress. The exemption amount is reduced by any gifts throughout the lifetime of more than the annual gift tax exclusion limit. The gift exclusion is per donor and per recipient, so a married couple can exlcude gifts up to double the amount shown in the chart to a child, for instance. Making a gift of more than the annual exclusion does not trigger immediate taxes, only the need to file a gift tax Form 709.

    Year of death Federal estate
    tax exemption
    Highest rate on
    exceeding exemption
    Annual gift tax
    exclusion
    2002 $1 million 50% $11,000
    2003 $1 million 49% $11,000
    2004 $1.5 million 48% $11,000
    2005 $1.5 million 47% $11,000
    2006 $2 million 46% $12,000
    2007 $2 million 45% $12,000
    2008 $2 million 45% $12,000
    2009 $3.5 million 45% $13,000
    2010 Estate: $5 million
    or unlimited
    Gift: $1 million
    35% or 0% $13,000
    2011 $5 million 35% $13,000
    2012 $5.12 million 35% $13,000
    2013 $5.25 million 40% $14,000
    2014 $5.34 million TBA $14,000

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