Article Spotlight


In this series we analyze current financial articles and explain how the conclusions of the article relate to our investment strategy.

Tax Consequences of the “Fiscal Cliff” Deal

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:

  •  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

  • 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.

  • 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.

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About Lorne Enquist

Lorne is a Certified Public Accountant and holds a Masters of Professional Accounting in Taxation. As a Financial Advisor for Empirical, Lorne manages portfolios and shares his tax consulting experience for strategic tax planning for Empirical clients.

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