Call Us Today: (201) 947-8081 or (646) 688-2807

If Congress Doesn’t Act, What Will Happen to the Tax Rates for 2013?

As shown by the following table, business owners will face a new tax world on January 1, 2013:

Tax Rate on
December 31, 2012

Tax Rate on
January 1, 2013

Top Individual Income Tax Rate

35%

39.6%

Additional Medicare Tax on Wages

N/A

.9%

Medicare Contribution Tax on Investments

N/A

3.8%

Maximum Rate on Long-Term Capital Gains

15%*

20%

Maximum Rate on Qualified Dividends

15%*

39.6%

Top Marginal Rate on Long-Term Capital Gains

15%*

23.8% (20% + 3.8%)

Highest Marginal Rate on Wages

35%

40.5% (39.6% + .9%)

Top Marginal Rate on Qualified Dividends

15%*

43.4% (39.6% + 3.8%)

* 0% for Persons with Marginal Tax Rate < 25%

 

There is a common consensus that Congress may in fact take action before year-end, such as by extending certain tax legislation that is expiring, for another year.   However, “given the certainty in tax rates through December 31, 2012, and the uncertainty in tax rates thereafter, businesses should consider taking action by year-end to strategize to reduce their tax bill.

For assistance with this or other tax or accounting matters please contact us at 201-947-8081 or 646-688-2807, or email us at iinfo@ourcpas.com.

Leave a Reply

You must be logged in to post a comment.

Latest Articles

Our Location

1330 Ave of the Americas, Suite 23A, New York, NY 10019
15-07 Alden Terrace, Fair Lawn, NJ 07410
One Bridge Plaza, Fort Lee, NJ 07024