The Fiscal Cliff: Scheduled Income Tax Hikes for 2013
Many folks are talking about tax planning to avoid the income tax increases currently set to kick in for 2013. Here's a short list of the income tax increases set to take effect on January 1.
Estate planning requires constant awareness of tax consequences. Darren Carlson is monitoring the current tax debates. Here, he illustrates what the income tax changes will be should Congress and the White House fail to pass alternative legislation. The so-called fiscal cliff will lead to new income taxes and higher rates.
Most of the changes target taxpayers earning more than $250,000. Higher-income taxpayers will face a new 3.8% tax on net investment income. This means that if you have unearned income (interest, dividends, gains, rents and royalties, etc.) and your individual income is over $200,000 (or if you're married and filing jointly and you're combined income is over $250,000), then you will have to pay this new tax.
Will any of these new taxes be repealed before they kick in? Congress and the White House are trying to balance an increase in tax revenues with cuts in spending, but no one knows if they'll be successful. Stay tuned for more updates from attorney Darren Carlson.
Darren R. Carlson's legal practice focuses on estate planning, which requires him to be informed on tax matters so that he can help his clients make the best decisions to protect their assets and their families.