Tax Legislation Notice

Our friends at Thomas & Libowitz, P.A. recently released an article explaining the most recent tax legislation. We hope you find it helpful.

The recently enacted 2012 American TaxPayer Relief Act is a sweeping tax package that includes, among many other items, permanent extension of the Bush-era tax cuts for most taxpayers, revised tax rates on ordinary and capital gain income for high-income individuals, modication of the estate tax, permanent relief from the AMT for individual taxpayers, limits on the deductions and exemptions of high-income individuals, and a host of retroactively resuscitated and extended tax breaks for individual and businesses. Here's a look at the key elements of the package:

• Tax Rates. For tax years beginning after 2012, the 10%, 15%, 25%, 28%, 33% and 35% 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 remain the same. However, there will be a new 39.6% rate, which will begin at the following taxable income thresholds: $400,000 (single, $425,000 (head of household), $450,000 (joint filers and qualifying window(er)s, and $225,000 (married filing separately). These dollar amounts will be inflation-adjusted for tax years after 2013.
• Estate Tax. See this explanation and more in the original article here.