written by David Myers
Now is the time to start preparing for 2013 Tax Increases. As summer turns to fall, our tax professionals begin to gear up for tax planning season. Businesses and individuals face multiple tax increases on January 1, 2013. Planning for taxes this season will allow you to permanently reduce your income tax bill.
Here is a summary of the increases that take effect in 2013:
- Increases associated with Healthcare Laws – Taxes Increase on unearned income by 3.8%. Taxes on wages increase by .9%. The increases apply to higher income individuals. Flexible spending accounts and medical itemized deductions are further limited.
- Bush Tax Cuts Eliminated – The individual income tax rates revert to 15, 25, 28, 36 and 39.6%. The Capital Gains rate increases to 20%. Dividends are taxed at ordinary income rates.
- Estate Tax Increases – The Estate Tax rate increases to 55% from 35%. Exempt estates decrease from 5 million to 1 million. Lifetime gifting limit reduces from 5 million to 1 million.
- Other Expiring Provisions – The $2,000 payroll tax cut ends. The alternative minimum tax patch expires. The child tax credit is reduced.
We will provide more information regarding tax law changes and tax saving ideas just in time for tax planning season. Look for our articles tagged with 2013 Tax Increases.