Monday, October 29, 2012
- People of all incomes are likely to experience an increase in the income tax. Even the lowest tax rate is set to increase from 10% to 15%.
- This is also true for the rates that govern the capital gains tax.
- In addition to the increase in the income and capital gains tax, the will be an increase in the Medicare tax on single taxpayers "whose income exceeds a threshold amount" established by the statute. These individuals "will have to pay an additional 0.9% Medicare tax on wages in excess of the threshold."
- In addition to the increase in the Medicare tax, all "net investment income and higher-income bracket trusts, estates, and individuals" will be subject to a 3.8% tax or a taxpayer's AGI whichever is lesser of the two.
- In addition to the estate tax exemption and rate expiring at the end of 2012, the 2% tax cut on Social Security will also expire.
- In 2013, higher-income taxpayers will see the beginning of the phase out for itemized deductions.
- Finally, the annual gift tax exclusion will increase from $13,000 to $14,000.
See 7 Tax Changes to Expect in 2013, Is That Legal?, JD Supra, Oct. 16, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.