Election results are in – and we’re back to the future. Split control of the government – which means no control by any particular side, and slow deliberate change. With this election we can be pretty sure that the tax policies enacted in the last several years that were leading up to 2013 will not change in the near term. Plan accordingly.
Based on current law, here are changes effective January 1, 2013 that you need to be thinking about. Be sure and talk to your CPA Advisor about these – the clock is ticking:
- Estate taxes back to 55% on anything over $1 Million
- Medicare taxes of an additional 3.8% now on the passive investment income and capital gains of high income people
- Capital gains tax rates increasing to 20% (or 23.8% with the Medicare add-on)
- Capital Expenditure (Sec 179) limit cut to $25,000
- Top income tax rates increasing to 36% and 39.6% (39.8% and 43.4% with Medicare add-on)
- Increasing FICA rates
- Increasing Medicare rates for high income people
- Changes in personal exemption and itemized deduction phase out levels
- Personal deductions for medical and dental expenses get harder
- Dependent care tax credit is reduced
- Student loan interest will be phasing out