Article Spotlight: Read the Article
The American Taxpayer Relief Act, passed by Congress on Tuesday, permanently extends a large number of items from the 2001 and 2003 tax acts and extends many other expired tax provisions. The key points of this legislation that our clients might be most concerned with include:
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- Individual Tax Rates: The current rates are retained (10%, 15%, 25%, 28%, 33%, and 35%) with a new top rate of 39.6% added for those with taxable income over $400,000 for single filers and $450,000 for joint filers
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- Capital Gains and Dividends: The 15% rate was retained on both capital gains and qualifying dividends but was increased to 20% for taxpayers in the new top tax bracket.
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- Deduction and Exemption Phaseout: The phaseout on personal exemptions and itemized deductions has returned for single taxpayers with AGI of over $250,000 and joint taxpayers with AGI over $300,000
- Sales Tax Deduction: the sales tax deduction which Washington residents have grown fond of was extended through 2013
For a comprehensive summary of the tax consequences of the American Taxpayer Relief Act, we encourage investors to reference the article attached above.
