It’s the beginning of the year. And what better way than to go over, the “Act” or the American Taxpayer Relief Act of 2012, signed into law just 2 years ago, reminds me of Robin Hood. This new law increases the tax of the wealthy and gives back to the poor and middleclass.
Some of its provisions are:
Extends earned income tax credit, child tax credit and higher education credit for at least 5 years.
Will be permanently indexing AMT (alternative minimum tax) for inflation, to stop the AMT tax from hitting most of us.
How does the act Increase the tax of the wealthy
- The 39.6%, tax bracket is back. for annual income over $400,000 for individuals and $450,000 for couples, the income rate increased from 35% to 39.6%, and
- Capital gains taxes increased from 15% to 20%.
- A phase-out of personal expense is back. Tax deductions and credits for incomes over $250,000 for individuals and $300,000 for couples would is reinstated.
- 0.9% additional Medicare tax on wages over $250,000
- Estate taxes would be set at 40% increase from the 2012 rate of 35% of the value above $5,250,000. And the 5 million exemption is here to stay.