GUAGENTI & ASSOCIATES LLC
Certified Public Accountants & Consultants
391 Lafayette Street                    40 Baldwin Road
Newark, NJ 07105                       Parsippany, NJ 07054
T: 973.344.6500
F: 973.344.2539
E: rpg@gaa-cpa.com
GENERAL INFORMATION

  

HIGHLIGHTS OF TAX CHANGES FOR 2013

3.8% Medicare Contribution Tax(Was a part of Obamacare and had nothing to do with the fiscal “cliff”.)

Imposed on net investment income(dividends, certain interest, cap gains) for joint filing couples making over $250K and unmarried individuals making over $200K.

Trap:   If husband earns $130K W2 income and wife earns $130k W2 income, they will be subject to this tax, but neither employer will not be withholding extra if the limits are reached. Watch your withholding for 2013.

 

“Permanent” extension of Bush era tax income rates for all

Except married taxpayers making over $450K and unmarried taxpayers making over $400K

Individual Income Tax Rates

Tax Tables have been compressed with the top rate going from 35% to 39.6% starting at the $450K/$400K threshhold

 

Trap: This does not include the 3.8% new Medicare tax.

Capital Gains/Dividends

Tax rate goes from Bush era 15% to 20% subject to the $450K/$400K thresholds.

Qualified dividends continue to be tax at capital gains rates(max 15%)

 

Trap: Again the 20% does not include the 3.8% new Medicare Tax.

“Permanent” AMT Relief

AMT exemption amounts have been increased for 2012 and will be indexed for inflation thereafter

AMT exemption for single filers goes from $33,750 to $50,600 for 2012

AMT exemption for married joint filers goes from $45,000 to $78,750 for 2012.

 

 Limitations on Itemized Deductions and Exemptions

Revived for 2013. Itemized deductions and Exemptions will be phased out for taxpayers reaching certain threshold amounts.

-          $300K for joint filers and surviving spouses

-          $275K for Heads of Household

-          $250K for single filers

-          $150K for married filing separately

ChildTax Credit

$1,000 child tax credit extended “permanently”.

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