Gwen Tilton, office managing director for the Louisville office, said her firm has been busy advising clients about the fiscal cliff.
The threat of paying more taxes next year because of the looming ?fiscal cliff? of spending cuts and tax increases set to take effect in January is keeping busy the accountants in the Louisville office of Dean Dorton Allen Ford PLLC.
?We have clients right and left trying to close transactions between now and Dec. 31, because they believe, and the law says, that they will pay more taxes (in 2013),? said Gwen Tilton, office managing director for the Louisville office.
If Congress does nothing, the tax increases are expected to hit nearly everyone. Payroll tax increases will hit wage earners and estate tax and dividends tax rate increases will hit the wealthy.
One of the more dramatic increases is scheduled to happen to investment income, Tilton said. For now, qualified dividends are taxed at a top rate of 15 percent. But after that special rate expires in December, dividend income will be taxed as ordinary income.
For those in the highest tax bracket, that will mean paying a tax rate on dividends of 39.6 percent next year, Tilton said. The top rate is now 35 percent, but it?s scheduled to increase as well.
As part of the Affordable Care Act, an additional 3.8 percent tax on investment income is scheduled to kick in next year. The top rate on long-term capital gains is also scheduled to rise from 15 percent to 20 percent.
Because of these potential increases in taxes on investment income, Tilton said, it?s a good idea to take any dividend income this year and sell any property subject to capital gains tax before January.
Another dramatic change is expected in the estate tax and gift tax, whose top rates are scheduled to rise from 35 percent to 55 percent. The lifetime exemption from the combined taxes is scheduled to drop from $5 million to $1 million.
Kevin Eigelbach covers these beats: Financial services, residential real estate, property and casualty insurance, construction, unions, engineers, architects, agriculture, South End, Southwest County, Bullitt County.
Follow Your Favorites with My News
My News is a way to create a customized news feed based on companies and industries that matter to you.
rick santorum ozzie guillen castro comments phish gluten free diet barry zito mac virus santorum drops out
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.