Current Issues Taxes

Capital Gains

Taxes on capital gains and dividend income exceeding $400,000/$450,000  (single/joint) increase from 15-20%  Also, the 3.8% tax on capital gains and dividends is in addition to this increase (as required by the Affordable Care Act).

Payroll Tax

Every tax payer will see a little less each month in their paycheck (on average, employees making between $40,000 – $50,000 will see $579 less this year; $50,000 – $75,000, $822 less).

1099 Reporting

Form 1099 is required in a variety of ways, but of most importance is requirements to send 1099s to non-corporation service providers.  This requirement if for any service over $600 in a given year.  For more information on this requirement visit the Third Party Reporting Center on the IRS website.

Estate Tax

For individual estates, the first $5 million in value is exempt, and $10 million for family estates, everything beyond that is taxed at 40% (up from 35%).

Small Business Expensing

Section 179
A one-year extension on bonus depreciation rates and Section 179 will allow businesses to invest in equipment and software.

AMT

Alternative Minimum Tax (AMT)
This is a permanent fix, which saves most taxpayers roughly $3,000 in additional taxes for 2013 and beyond. It is also now indexed for inflation so the same issue does not occur in the future. The new exemptions are now $50,600 single and $78,750 married and indexes the exemption and phase-out amounts. Please note the new AMT rate is for tax years beginning after December 31, 2011 – i.e. the 2012 tax year.


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