Articles by E. Rhett Buck
Deducting unreimbursed expenses of charity volunteers [2012-07-15] :
Charitable contribution deduction for volunteer's unreimbursed expenses [2012-07-08] :
Tax Update On Individual and Small Business Income Taxation
January 7, 2013
E. Rhett Buck, Attorney-CPA
3730 Kirby Drive, # 1200, Houston, TX 77098
A. Political Environment
B. Annual Deficit vs. National Debt
C. Recession, Recovery and Spending
D. Extension of Bush Tax Cuts
E. Sequestration Spending Cuts
American Taxpayer Relief Act of 2012.
It came down to the last minute – and then some – but Congress did pass the American
Taxpayer Relief Act of 2012.
The Congressional Budget Office estimates that this bill would add $329 billion to
2013 budget deficits and approximately $3.9 trillion to the deficits over the
next 10 years. The bill postponed the scheduled government spending cuts for the
next two months, which means the lawmakers and the President must be working on
another significant package within the next 60 days. Simply put, the bill has
not addressed the real economic issue facing the nation.
Highlights of the bill include:
- Permanent Alternative Minimum Tax (AMT) patch, adjusted for inflation. This will protect 30 million taxpayers from AMT liability.
- Preservation of the Bush-era tax cuts for individuals earning less than $400,000 (AGI) and families earning less than $450,000. Tax rates will increase from 36% to 39.5% for taxpayers above those income thresholds.
- Preservation of the $5 million individual ($10 million per couple) exemption for estate taxes. Estate value above that threshold will be taxed at 40% rate, up from the current 35%.
- Increase in the dividends and capital gains tax rate from 15% to 20% for individual taxpayers earning above $400,000 (AGI) and families earning above $450,000.
- An end to the payroll tax holiday. The social security withholding rate is reset to its previous 6.2% rate on the first $113,700 in earnings for each individual taxpayer.
- Extension of the $1,000 Child Tax Credit, the enhanced Earned Income Tax Credit, and the enhanced American Opportunity College tuition tax credit.