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American Taxpayer Relief Act of 2012 Tax Changes

2011 "American Taxpayer Relief Act of 2012" 2013 FISCAL CLIFF TAX DEAL 2012 VS 2013 TAXES 2012 Tax Details Change 2013 Tax Details INDIVIDUAL TAXPAYER INCOME TAX RATES $0-8,700* $8,700-35,350 $35,350-85,650 $85,650-178,650 $178,650-388,350 $388,350-400,000 $400,000+ $0-8,925* $8,925-36,250 $36,250-87,850 $87,850-183,250 $183,250-398,350 $398,350-400,000 10% 0% 10% 15% 0% 15% 25% 0% 25% 28% 0% 28% 33% 0% 33% 35% 35% 0% 13% 35% 39.6% $400,000+ *Figures for filing as single MARRIED FILING JOINTLY INCOME TAX RATES $0-17,400* 10% $17,400-70,400 15% $70,400-142,700 25% $142,700-217,450 28% $217,450-388,350 33% $388,350-450,000 35% $450,000+ 35% 10% $0-17,850* 15% $17,850-72,500 25% $72,500-146,400 28% $146,400-223,050 0% 0% 0% 0% 33% $223,050-398,350 35% $398,350-450,000 0% 0% 13% 39.6% $450,000+ *Figures for filing jointly LONG TERM CAPITAL GAINS & QUALIFIED DIVIDEND TAX RATES Tax Bracket/Income Amount Tax Rate Tax Rate Tax Bracket/Income Amount 10% & 15% 0% 0% 0% 15% 10% & 15% 25% to 200K 15% 0% 25% to 200K (250K Married) (250K Married) 200K-400K 15% 25% 18.8%* 200K-400K (250K-450K Married) (250K-450K Married) 400K+ 15% 59% 23.8%* 400K+ (450K+ Married) (450K+ Married) *Includes additional 3.8% surcharge that was included in Obamacare ESTATE TAX/DEATH TAX 35% 14% 40% (D TAXES The tax rate for the amount The tax rate for the amount over the unified lifetime credit over the unified lifetime credit 5.13 M 5.25 M Unified credit was increased for inflation AT TH Unified credit amount. Anything above this amount is taxed at the 35% tax rate Unified credit amount. Anything above this amount is taxed at the 40% tax rate PAYROLL TAXES 4.2%* 48% 6.2% *The lower 4.2% was due to the "payroll tax holiday" that cut 2% to every American Social Security payroll tax for 2 years. The payroll tax holiday expired 12/31/2012 ALTERNATIVE MINIMUM TAX $50,600 Amount adjusts annually for inflation and does not require a "patch" to adjust $51,900 Exemption Amount Exemption Amount $78,750 for married filing jointly. This amount was fixed and would require a "patch" when it needed to be adjusted $80,800 for married filing jointly. This amount will be adjusted annually for inflation ITEMIZED TAX DEDUCTIONS Little Limitations Income over the applicable amount will trigger an itemized Limited by Income deduction limitation that is 2012 doesn't have many limitations on popular itemized tax deductions for any income level the lesser of (a) 3% of the adjusted gross income above the applicable amount, or (b) 80% of the amount of the itemized deductions otherwise allowable for the taxable year 2013 put limits on itemized deductions that begin to kick in at $250K for individuals and $300k for joint filers CAUTION) The limitations reduce the benefit NO LIMITS for charitable contributions, mortgage interest, state, local & property taxes as well as miscellaneous itemized deductions EARNED INCOME TAX CREDIT $5,891 Max $6,044 Max Tax credit was extended Maximum amount that can be claimed with 3 or more qualifying children. Income limits apply. Is set to expire in 2017 Maximum amount that can be claimed for another 5 years and adjusted for inflation with 3 or more qualifying children. Income limits apply. Was set to expire at the end of 2012 CHILD TAX CREDIT $1,000 Per Child $1,000 Per Child Tax credit was extended Maximum amount that can be claimed per child. Limited by income. Was set to drop to $500 per child at the end of 2012 Maximum amount that can be claimed for another 5 years per child. Limited by income. Expires in year 2017 CHILD & DEPENDENT CARE TAX CREDIT $3K Max Per Dependent or $6K Max Per Family $3K Max Per Dependent or $6K Max Per Family Tax credit was made permanent Amount also determined by income. Was set to go to 30% of expenses with a Max of $4,800 per family at end of 2012 Amount also determined by income. Now is a permanent tax credit ADOPTION TAX CREDIT $12,650 per Child $12,970 per Child Tax credit was made Max amount is $12,650 based on money spent on adoption-related expenses. Was set to expire at end of 2012. Subject to income level phase outs ($189,710-$229,710) permanent and non-refundable if credit was greater than the total tax liability Max amount is $12,970 based on money spent on adoption-related expenses. Made pemanent. Subject to income level phase outs ($1894,580-$234,580) AMERICAN OPPORTUNITY TAX CREDIT $2,500 Max $2,500 Max Per Student Tax credit was extended for another Per Student years Covers $2K of first $2K of expenses plus 25% of the next $2K. 40% of credit is Covers $2K of first $2K of ex penses plus 25% of the next $2K. 40% of credit is refundable Subject to income level phase outs. Set to Expire December 31, 2012 refundable Subject to income level phase outs BROUGHT TO YOU BY: Sources: http://en.wikipedia.org/wiki/American_Taxpayer_Relief_Act_of_2012 http://www.gpo.gov/fdsys/pkg/BILLS-112hrBeas/pdf/BILLS-12hr8eas.pdf http://www.irs.govluac/Newsroom/Annual-Inflation-Adjustments-for-2013 http://en.wikipedia.org/wiki/Payroll_tax#United_States http://fairmark.com/atra-capital-gain-tax-rates/ http://www.cbsnews.com/8301-250_162-57561465/its-official-deal-reached-on-fiscal-cliff/ http://www.law.cornell edu/uscode/text/26/68 http://adoptiontaxcredit.org/faqs/ http://www.forbes.com/sites/greatspeculations/2013/01/09/pease-limitation-puts-a-lid-on-itemized-deductions-for-wealthy-folks/ Free to reproduce. Please línk to original page or www.backtaxeshelp.com when reproducing. BackTaxesHelp.com Text, design and images 2013 Back Taxes Help LLC, except for third-party trademarks and images, which are the property of their respective owners %24

American Taxpayer Relief Act of 2012 Tax Changes

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A visual comparison of the tax law before and after the passage of the American Taxpayer Relief Act of 2012. The left column shows what the law was in 2012, middle column shows the negotiated change a...

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