Cash Flow Planning for Life - Helping you reach your personal & professional financial goals.

Cash Flow Planning for Life

Helping you reach your personal & professional financial goals.

Are you familiar with The American Taxpayer Relief Act of 2012 and the 10 common tax provisions effected by it?

The American Taxpayer Relief Act of 2012

This is the first installment of 2013 and Beyond Tax Planning
which can also be downloaded from our eBook library.

Do you know what’s going to expire?

Here’s a list of the most 10 of the most common tax provisions effected by The American Taxpayer Relief Act of 2012 with expiration information:

1. 2012 Tax Rates – were 10%/15%/25%/28%/33%/35% tax rates will increase to 10%/15%/28%/31%/36%/39.6% for 2013.  Individuals with AGI that exceeds $400,000 (single) and $450,000 (married filing jointly) will fall under the 39.6% rate.

2. Social Security – The lower 4.2% social security rate (employee only) will revert back to 6.2% as of 1/1/2013.  Was not extended and allowed to expire.

3. Bonus depreciation and $125,000 section 179 expensing – bonus depreciation will expire and section 179 expensing will be reduced to $25,000 as of 1/1/2013.  This provision was extended through 2013.

4. Education Credit (American Opportunity Tax Credit) is set to expire and revert back to the Hope Scholarship credit. Was extended through 2017.

5. Itemized Deductions –  3% phase out on itemized deductions and personal exemptions is back in place for 2013 if your adjusted gross income (AGI) is over $$250,000 (single) and $300,000 (Married filing Jointly). This phase out was temporally repealed after 2009.

6. Child Tax Credit – The $1,000 child tax credit will be reduced to $500.  Extended and $1,000 Credit was made permanent.

7. Exclusion from gross income for discharge of indebtedness on a principle residence. Was extended through 2013.

8. Deductibility of mortgage insurance premiums as interest. Was extended through 2013.

9. Deductibility of State and Local sales tax instead of State income tax. Was extended through 2013.

10. There are many other provisions set to expire that are beyond the scope of this EBook.

2013-&-Beyond-Tax-Planning-Tax planning has changed from income deferral and acceleration of expenses each December, into “spreading” of income and expenses over multiple years. Tax planning has become a moving target, with multiple rate changes with different impacts based on income levels for a given year. Your situation is unique so now more there ever, meeting with your advisors prior to the year-end is vital.

Interest in learning more about The American Taxpayer Relief Act of 2012, the changes, and a few suggestions for planning ideas? Download my FREE eBook “2013 and Beyond Tax Planning” or follow my upcoming blog posts. Need help with your tax planning? Call my Naples office:  (239) 384-9688 or Fort Myers office: (239) 768-5008, or contact me online.

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-Mark

This information is based on facts, assumptions and representations as stated and authorities that are subject to change. We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.
LEGAL NOTICE AND DISCLAIMER: The information within this blog is for informational and educational purposes only and is not tax advice and should not be used as such. The facts of each individual situation can have significantly different outcomes when applying tax law. The hiring of a CPA is an important decision not to be based solely on advertisements. 

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