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2013 Tax Scenarios

by David Huff on October 16, 2012

 

Well, elections are right around the corner and we know how overwhelming all the information on commercials and debates can be so we decided to give an overview of where both candidates stand in regard to tax policies. Ã‚ Ãƒâ€š  *** Note that we are not giving support to either candidate…we just want you to be well-informed on November 6.

 

Any president plays a major role in the shaping of tax policies and possibly even reforming the entire Tax Code.  As most of us are well aware the Bush-era tax cuts are scheduled to expire at the end of this year on December 31, it is critical that all voters understand both candidates’ positions.

 

THREE RATE CHANGE SCENARIOS FOR 2013

Complete Extension:

The existing rates for 2012 of 10%, 15%, 25%, 28%, 33% and 35% continue unchanged for 2013.

 

Complete Sunset:

If Congress fails to extend the Bush-era tax rates, the 2013 rates would change under the mandatory sunset provision based on the following schedule:

Existing   2012 rate

Sunset   rate

10% and 15%

15%

25%

28%

28%

31%

33%

36%

35%

39.6%

 

Obama Proposal:

The 2013 rates would change under President Obama’s plan released in February 2012.  These rates are based on Joint Committee on Taxation projections:

Existing 2012 rate

Obama rate proposal

10% and 15%

10% and 15%

25%

25%

28%

28%

33%

33% up to $200,000 joint returns),   inflation adjusted

33%

36%(above $200,000/$250,000 joint   returns)

35%

39.6%

_____________________________________________________________________________________________________

David W Huff, CPA, PFS, MS is a partner at Person Huff CPA Group. He provides clients with tax preparation and consulting services, accounting services, retirement plan and benefit consulting, accounting software technical support and training, and management advisory services. His specialty is helping new businesses organize their operations to maximize tax savings and move quickly from start-up to profitability.  You can reach David by email at: david@personhuffcpa.com

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