The recent actions by Congress to avoid the fiscal cliff were predictably understated, justifying a more conservative approach to 2012 year end tax moves. The important rate changes were to add a top rate of 39.6% that will apply to taxable income over $450,000 for a married couple, $400,000 for a single. Long term capital gains rates were increased from 15 to 20% but again only for those with taxable income over $450,000. Surprisingly, qualified dividends, currently taxed at 15%, will rise to 20% but again only for those with incomes over $450,000. The changes to the Alternative Minimum Tax involved raising the exemption from about $74,000 to $78,000 and indexing it for inflation. This will hardly be felt by those in the AMT.
All changes are effective for 2013.
Please contact the office if there are questions.