Now that the election is over, it’s time to turn to more important matters, namely avoiding being stuck with the bill.
I’m going to start compiling a list of links to the various tax law changes that are currently scheduled to take effect in 2013, both from the potential expiration of the Bush tax cuts and the implementation of the new Obamacare taxes. Comments on tax planning strategies are welcome.
We’ll start with wikipedia:
- In 2008–2012, the tax rate on qualified dividends and long term capital gains is 0% for those in the 10% and 15% income tax brackets.
- After 2012, dividends will be taxed at the taxpayer’s ordinary income tax rate, regardless of his or her tax bracket.
- After 2012, the long-term capital gains tax rate will be 20% (10% for taxpayers in the 15% tax bracket).
- After 2012, the qualified five-year 18% capital gains rate (8% for taxpayers in the 15% tax bracket) will be reinstated.
Marginal rate tables under three scenarios:
Scenario 1: Tax cuts under the extension of the Bush-era tax cuts for all
Rate | Single Filers | Married Joint Filers | Head of Household Filers |
10% | $0 to $8,950 | $0 to $17,900 | $0 to $12,750 |
15% | $8,950 to $36,250 | $17,900 to $72,500 | $12,750 to $48,600 |
25% | $36,250 to $87,850 | $72,500 to $146,400 | $48,600 to $125,450 |
28% | $87,850 to $183,250 | $146,400 to $223,050 | $125,450 to $203,150 |
33% | $183,250 to $398,350 | $223,050 to $398,350 | $203,150 to $398,350 |
35% | $398,350 and up | $398,350 and up | $398,350 and up |
Scenario 2: Tax brackets under the expiration of the Bush-era tax cuts for all
Rate | Single Filers | Married Joint Filers | Head of Household Filers |
15% | $0 to $36,250 | $0 to $60,550 | $0 to $48,600 |
28% | $36,250 to $87,850 | $60,550 to $146,400 | $48,600 to $125,450 |
31% | $87,850 to $183,250 | $146,400 to $223,050 | $125,450 to $203,150 |
36% | $183,250 to $398,350 | $223,050 to $398,350 | $203,150 to $398,350 |
39.60% | $398,350 and up | $398,350 and up | $398,350 and up |
Scenario 3: Tax brackets under the expiration of the Bush-era tax cuts for high-income
Rate | Single Filers | Married Joint Filers | Head of Household Filers |
10% | $0 to $8,950 | $0 to $17,900 | $0 to $12,750 |
15% | $8,950 to $36,250 | $17,900 to $72,500 | $12,750 to $48,600 |
25% | $36,250 to $87,850 | $72,500 to $146,400 | $48,600 to $125,450 |
28% | $87,850 to $183,250 | $146,400 to $223,050 | $125,450 to $203,150 |
33% | $183,250 to $203,600 | $223,050 to $247,000 | $203,150 to $227,300 |
36% | $203,600 to $398,350 | $247,000 to $398,350 | $227,300 to $398,350 |
39.60% | $398,350 and up | $398,350 and up | $398,350 and up |
Forbes Tax Table
Obamacare taxes:
Main individual ones are these:
A 3.8% surtax on “investment income” when your adjusted gross income is more than $200,000 ($250,000 for joint-filers). What is “investment income?” Dividends, interest, rent, capital gains, annuities, house sales, partnerships, etc. Taxes on dividends will rise from 15% to 18.8%–if Congress extends the Bush tax cuts. If Congress does not extend the Bush tax cuts, taxes on dividends will rise from 15% to 43.8%
A 0.9% surtax on Medicare taxes for those making $200,000 or more ($250,000 joint). You already pay Medicare tax of 1.45%, and your employer pays another 1.45% for you (unless you’re self-employed, in which case you pay the whole 2.9% yourself). Next year, your Medicare bill will be 2.35%.
Anyone know of any I missed?
Filed under: 2013 and beyond, taxes | 15 Comments »