2012 American Taxpayer Relief Act

By: David Mugmon, Partner of Berman Goldman &Ribakow, LLP

BWCC Member since 2002

Berman Goldman & Ribakow LLP
Certifie Public Accountants • Business Consultants

 

The new 2012 American Taxpayer Relief Act is a sweeping tax package that includes, among other items, a permanent extension of the Bush-era tax cuts for most taxpayers and revised tax rates on ordinary and capital gain income for high-income individuals.  These provisions will have a significant impact on business owners.

•Tax rates. For tax years beginning after 2012, tax brackets from the Bush tax cuts will remain in place and are made permanent. This means that, for most Americans, the tax rates will stay the same. However, there will be a new 39.6% rate, which will begin at a $400,000 threshold.

•Capital gains and qualified dividends rates. The new law establishes a new 20% rate. Beginning in 2013, if income falls in the 39.6% tax bracket a 20% rate applies. It should be noted that the 20% top rate does not include the new 3.8% surtax on investment-type income and gains for tax years beginning after 2012, which applies on investment income above $200,000 in adjusted gross income. So actually, the top rate for capital gains and dividends beginning in 2013 will be 23.8%.

There are many more items included in the new Tax Act and business owner should consult their tax advisors to plan for the upcoming year.

To learn more, contact David Mugmon at dmugmon@bgrllp.com, 410-418-4400 or www.bgrcpas.com