Brian Borawski CPA, PC

We have a new tax bill.  I’m going to cover each of these items in detail but I wanted to make sure everyone had a quick summary version they could refer too

Individual Income Tax Rates – If your single and make less than $400,000, married and make less than $450,000 or a head of household and you make less than $425,000, your marginal tax rates won’t change. If you make more than this, your new marginal tax rate will go up from 35% to 39.6%.

Capital Gains and Dividends Rate – The top rate on dividends and capital gains will go up from 15% to 20%.  This new rate will apply to those who saw their individual income tax rate increase.

AMT Relief – There’s a new and permanent AMT exemption amount.  If you’re single, it’s $50,600, if you’re married filing jointly it’s $78,750 and if you’re married filing seperately it’s $39,375.

Itemized Deduction Limitation – Called PEACE, the phaseout on itemized deductions is back.  At certain income levels, your itemized deductions begin to phase out.  This level is $300,000 for married couples and surviving spouses, $275,000 for head of households, $250,000 for unmarried tax payers and $150,000 for those married but filing seperately.

Personal Exemption Phaseout – Exemption phaseouts are back and the income limits are the same as the itemized deduction limit.

Federal Estate, Gift and GST Tax – The new maxmimum estate and gift tax is now 40% and the exclusion amount has been fixed at $5 million.

State and Local Sales Tax Deduction – The state and local sales tax deduction has been extended for 2013.

Child Tax Credit – The $1,000 child tax credit has been extended permanently.

Earned Income Tax Credit – Some of the more recent changes to the EIC have either been made permanent or extended through 2017.

Those are the bigger things but there were also quite a few other items that were either enacted or extended.  I’ll be touching on all of these things either by themselves or grouped up over the next few days.