September 2012 - Landlord News
2013 Tax Changes - Should You Be Worried?
|What's at Stake||What Will Happen Jan. 1 Without Federal Action|
|Income Tax Brackets||Rates would rise for all Americans, with the lowest bracket rising from 10% to 15% and the highest from 35% to 39.6%.|
|Dividends||Would be taxed at the same rate as ordinary income —|
instead of today's 15% maximum rate.
|Capital Gains||Maximum rate would rise to 20% from the current 15%.|
|Personal Exemptions and Itemized Deductions||Would be reduced for high-income taxpayers.|
|Alternative Minimum Tax||Without extension of temporary exemptions, more taxpayers will be snared by this parallel tax system.|
|Payroll Taxes||Individuals' share of Social Security taxes would return from the temporary 4.2% to the normal 6.2%; the self-employment tax rate would rise from 10.4% to 12.4%.|
|Estate Taxes||Maximum estate tax rate would rise to 55% from the current 35%; estates valued at more than $1 million would face the tax (versus the current $5 million).|
|Education Savings||The annual contribution limit for Coverdell Education Savings Accounts would fall from $2,000 to $500 and qualified withdrawals would no longer be permitted for K-12 expenses.|
|Child Tax Credit||Falls from $1,000 to $500.|
|Married Couples Filing|
|The expiration of features meant to address a so-called "marriage penalty" would reduce standard deductions and push many couples into higher tax brackets.|
|Maximum credit would fall from $13,360 to $6,000 and would only be available for special needs children.|
|Other Popular Tax Breaks|
|Deductions for state and local sales taxes, higher education and teachers' classroom supplies all would vanish.|
An Uncertain Outcome
Personal Tax Moves: Watch and Wait
- Don't make big bets. "Since the outcome is unpredictable, I wouldn't make any big financial decisions based on an assumption that the tax debate will end one way or another," Montanaro says.
- Tighten your budget. "If your taxes do increase, you'll be better prepared. If they don't, you'll have a windfall to dedicate to other goals," he says.
- Stay alert. "Once the outcome is known, you may find it will be to your advantage to make some financial moves this year — under the current tax law," Montanaro says. For example, if you face higher capital-gains rates in 2013, it may be better to sell some of your investments sooner rather than later.
NH Healthy Homes Conference - The Second Annual NH Healthy Homes ConferenceMonday, October 15, 2012
Concord Courtyard by Mariott
Grappone Conference Center
Concord NH from 8:am - 4pmTo register online: Click here