FollowHighlights of the American Taxpayer Relief Act of 2012 include:
The lower Bush-era tax rates are now permanent for 2013 and beyond, with the exception of high income earners (individuals with taxable income of more than $400,000, $425,000 for head of household, and $450,000 married, filing jointly) whose rates will increase from 35% to 39.6%
The AMT exemption is now permanent and will be indexed for inflation. Exemption amount for Married filing separate – $39,375, Single, head of household $50,600, Married filing jointly $78,750. For California residents the 2012 AMT exemption rates are slightly different – $83,225, $62,420, and $41,612. AMT exemption phase out amounts are $312,095 for joint filers and a surviving spouse, $234,072 for single taxpayers and heads of household, and $156,047 for married taxpayers filing separately and estates and trusts.
Capital gains and qualified dividend rates will remain at 15% for most taxpayers but will increase to 20% for high income earners. ($400,000, $425,000, or $450,000 depending on filing status)
The 2% payroll tax holiday will not be extended. For wages paid after January 1, 2013, the Social Security tax will return to 6.2% . With Medicare tax, the total employee share of the tax will be 7.65%.
Itemized deduction and exemption payouts return. ($250,000, $275,000, $300,000, $150,000 depending on filing status) California phase out will be calculated differently. ($339,464, $254,599, $169,730 depending on filing status)
There is a long list of nonrefundable credits, Provisions made permanent and other details.
For specific information about the Tax Payer Relief Act of 2012 read this PDF
In the meantime make sure to make an appointment as soon as possible with your accountant today to discuss how the Tax Payer relief act will affect your business and financial situation.
Kevin E. Thompson, CPA
310-729-0703
kevin@kevinthompsoncpa.com kthompcpa@aol.com
Torrance/Redondo Beach
1014 S. Pacific Coast Hwy. #105, Redondo Beach, CA 90277
310-792-0819 (Fax) 310-872-5647
Santa Monica
2601 Ocean Park Blvd. #310, Santa Monica, CA 90405
310-450-4625 (Fax) 310-450-6787
