Monthly Archives: January 2013

JANUARY 2013 NEWS FROM SULLIVAN & ASSOCIATES, PC

So I guess the Mayan cliff was somewhat avoided, or was it the Fiscal Apocalypse? I lose track. I won’t get into my thoughts on our elected “leaders,” but they did come up with something that will raise some revenue, but very little happened on the expense side of the ledger. Things that make you go hmmm. It will be interesting to see how the next few rounds of this melodrama play out. Stay tuned. I hope you all enjoyed the holidays. Have a great January.

The Fiscal Cliff Bill is dubbed the American Taxpayer Relief Act of 2012 (H.R. 8).

Please find a summary of the major provisions below:

INCOME TAXES

Permanently extend most of the individual income tax relief provided in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) for unmarried taxpayers with income of $400,000 or less and married taxpayers with income of $450,000 or less.

Permanently set the top marginal tax rate at 39.6 percent (up from 35 percent in 2012) for unmarried taxpayers with income over $400,000 and married taxpayers with income over $450,000.

Permanently set the top rate on income from capital gains and qualified dividends at 20 percent (up from 15 percent in 2012) for unmarried taxpayers with income over $400,000 and married taxpayers with income over $450,000.

Increase the individual AMT exemption to $50,600 for unmarried filers and $78,750 for married filers for 2012, permanently index those exemption amounts for inflation beginning in 2013, and allow nonrefundable personal credits against the AMT.

Permanently reinstate the personal exemption phase-out (PEP) and limitation on itemized deductions (Pease) for single taxpayers with adjusted gross income (AGI) above $250,000 and joint filers with AGI over $300,000, with the thresholds indexed annually for inflation.

CORPORATE TAXES

Extend through 2013 an array of expired and expiring tax provisions such as the research and experimentation credit, the subpart F active financing exception, and the look-through rule for payments between related controlled foreign corporations.

ESTATE TAXES

Permanently set the top estate tax rate at 40 percent for estates worth more than $5 million.

PAYROLL TAXES

The new law does not extend the reduction in payroll taxes that was in effect in 2011 and 2012.

OBAMACARE TAXES

Does not reduce or delay new tax increases on earned and unearned income that were enacted under the Patient Protection and Affordable Care Act of 2010 and that took effect on January 1, 2013.