Dave Miller Real Estate, by Shepherd Realty

How Will You be Taxed in 2013?

Posted on Friday, December 21st, 2012 at 2:39 am

Have you taken any time to consider how you may or may not want to handle your finances?

Summary of Potential Tax Changes for 2013

Tax Law Effective through   12/31/2012 May change on   1/1/2013
Employee Payroll   Tax 4.2% withheld 6.2% withheld
Individual Income   Tax 6 income brackets, taxed   at 10%, 15%, 25%, 28%, 33% and 35% 5 income brackets, taxed   at 15%, 28%, 31%, 36% and 39.6%
Capital Gains and   Qualified Dividends Investors in the 10% and   15% tax brackets are not taxed on long-term capital gains and qualified   dividends. The majority of investors are taxed at 15%. Short-term capital   gains and qualified dividends are taxed at a maximum rate of 35%. The top tax rate on   long-term capital gains will be 20% and for short-term capital gains, 39.6%.   Dividends will be taxed as income, and the highest rate paid could be 39.6%.
Estate Tax Estates worth more than   $5.12 million are taxed at 35%. Estates worth less than that amount are   exempt. Estates worth more than $1   million will be taxed at 55%.
Marriage Tax The standard deduction for   a married couple filing jointly is twice the standard deduction of an   unmarried single filer. The standard deduction for   joint filers will be reduced from 200% to 167% of the single filer’s   deduction. The lowest bracket will be taxed at 15% rather than 10% as in   2012.
Itemized   Deductions Claims from Schedule A are   not limited, regardless of income. The itemized deduction   phaseout threshold will be $177,000.
Exemptions Taxpayers can claim   exemptions for themselves and dependents. The personal exemption   phase-out will be reinstated, affecting the deductions of higher-income   taxpayers.
Child Tax Credit $1,000 for each qualifying   dependent child $500 for each qualifying   dependent child
Child and   Dependent Care Tax Credit Up to $3,000 for one child   or disabled adult dependent and $6,000 for two or more dependents, up to 35%   based on income. $2,400 for one child or   disabled adult dependent and $4,800 for two or more dependents, up to 30%   based on income.
Alternative Minimum   Tax In 2011, the AMT exemption   was $74,450 for married taxpayers filing jointly.  For individuals, the   exemption was $48,450. In 2013, the AMT will   revert to $45,000 for married taxpayers filing jointly.  For   individuals, the exemption will become $33,750.
New Medicare Taxes Currently, the Medicare   tax on salary or self-employment is 2.9%. For employees on salary, this tax   is split evenly between the employee and the employer.  For those   self-employed, the individual pays the entire 2.9%. A 0.9% Medicare tax   increase on salaries or self-employment income in excess of $250,000 for   married taxpayers filing jointly, $200,000 for individual taxpayers, and   $125,000 for married individuals filing separately.  Also, a 3.8%   Medicare contribution tax will be imposed on long-term capital gains and   dividends for higher income individuals.