Sunday, December 1, 2013

New Hidden Tax Hikes Will Hit Many People This Year

WSJ reports:

On New Year's Day [2013], Congress finally agreed to settle many unresolved issues, raising taxes for most Americans. But only one change was simple: the end of a two-percentage-point cut in Social Security taxes, which is costing wage earners up to $2,274[...]

This year's code includes two new taxes, a new top income-tax rate, a new top rate on long-term capital gains and dividends, a new inflation adjustment to the alternative minimum tax, or AMT, and two revived tax-benefit "phaseouts." (See table on page B10.)

The upshot: For many people, it is more important than ever to estimate next April's tax bill before year-end, while it might still be possible to make adjustments.

While the top 1% of taxpayers will bear much of the burden of this year's increases, experts say, the code also has new tax traps for the affluent, roughly defined as people with an adjusted gross income, or AGI, between $150,000 and $500,000.

"Especially for families in this range, it's hard to predict the tax rate without a sophisticated computer program," says Chris Hesse, a tax specialist at accounting firm CliftonLarsonAllen in Minneapolis.

The changes make it especially hard to guess the marginal tax rate—or how much a taxpayer will owe on added dollars of income[...]

This year's taxes become even more complex if the taxpayer has "passive" income or losses from investments, or a sharp spike in investment income.


  1. I actually just ran an estimate for the first time last week. compared my estimated 2013 income under old 2012 rules and new 2013 rules. result? taxes will be higher by over 36%. admittedly, i'm probably bottom rung of top 2%. we get hit by increase tax on cap gains and dividends (15% becomes 20%), increase in top marginal rate (35% becomes 39.6%), new 3.8% surtax on net investment income, added .9% medicare surtax on salary above threshold, new phase out of personal exemptions, and new reduction of itemized deductions.

    1. Any yet, these fucking thieves will only spend even MORE! Then they'll scream that they need to raise taxes yet AGAIN!