November 21, 2012
With the election behind us, we now have a much clearer picture of how taxes will be affected in 2013 and beyond. With this insight, we can better help our clients create strategic, fiscally responsible tax programs for the coming year.
Under the Obama administration, the objective is to maintain the old tax rates for taxpayers with adjusted gross income below $250,000. (The old tax rates were originally enacted under the Bush administration and set to expire at the end of 2012.)
This means that taxes will likely rise for businesses and wealthier individuals next year. Based on Obama’s policy initiatives, income tax rates for the top tax brackets will likely rise to Clinton-era rates. Estate tax lifetime credits will likely fall as well to an amount between $1 million and $3.5 million. The anticipated Congressional stalemate with a Democratic-controlled Senate and Executive branch may very well make the default “Sunset” of $1 million a reality. And finally, capital gains rates are likely to rise as well. As a result, effective tax planning in the face of these increases will become even more important for taxpayers.
We understand that these changes are complex and can be overwhelming, but we are here to help. Contact us with any questions and to begin planning an effective tax strategy.
Spend it? Save it? Invest it? Share it? Here are a few ideas for putting your tax refund to work for you:
The American Rescue Plan Act (ARPA), signed into law in early March, aims at offering widespread financial relief to individuals and employers adversely affected by the COVID-19 pandemic. The law specifically targets small businesses in many of its provisions.
Most professions have their own lingo, and accounting is no different. What is different is that you have a vested interest in understanding what your accountant tells you about your financial situation. So, here’s a quick primer on common accounting terms—some business-related, some general—to keep you in the know: