MasonLaw, PC | NC Elder & Special Needs Law Attorney

  • Elder Law
  • Special Needs Law
  • Hot Topics & Info
    • 2022 Medicare Premiums, Coinsurance and Deductibles
    • 2022 NC Medicaid and Special Assistance Rates
    • NC Nursing Home Medicaid Law Explained
    • 2022 Federal Benefit Rate – Federal Poverty Level
    • 2022 Veteran (VA) Benefit Rates
  • About
    • Find Us – Charlotte or Asheboro
    • Who to Call
    • Bob Mason, Attorney
    • Ann Mason, Practice Manager
    • Tammy Webster, Paralegal
    • Jennifer Barbee Swift, Benefits Specialist
    • News / Press
  • Client Portal
You are here: Home / General / 2013 Taxpayer Relief? Does It Affect You?

January 3, 2013 by bob mason Leave a Comment

2013 Taxpayer Relief? Does It Affect You?

Belt tightening
2013 Belt Tightening?

Yesterday Congress passed, and President Obama signed, legislation averting for the time being a trip over the “Fiscal Cliff.” I say “for the time being” because the real slugfest is ahead during the 113th Congress. The deal did very little to address stupendous amounts of debt which most sober folks say MUST be addressed to avoid a real catastrophe . . . the question is not “whether” but “how” to address the problem.

In the meantime, the tax resolutions were relatively benign unless you happen to have taxable income of more than $400,000 a year. Now $400,000 is a lot of money, and it doesn’t apply to most of my clients . . . but occasionally . . .

For most nonworking folks, however, it will be business as usual until the real problems kick-in (see the first paragraph of this article). For working folks (Everyone . . . not just the “rich”) payroll taxes will grab an extra 2% of pay and they’ll feel that in the next paycheck.

In a Nutshell:

All the old income tax rates apply unless you are an individual with taxable income of $400,000 or more or a couple with taxable income of $450,000. If you fit in this category you get a new tax bracket! Lucky you: 39.6%

Tax, Anyone?

If you fit the group with new tax bracket ($400,000/$450,000) long-term capital gains will set you back an extra 5% at 20% . . . the rest of your friends will be taxed at the “usual” 15%.

We’ve been going back and forth over the past decade on phasing out personal exemptions and certain deductions for all taxpayers. Congress usually rode in with a last minute fix. Now there is a permanent solution with no phase-out UNLESS . . . you happen to be part of a married couple filing jointly earning over $300,000 or are a single taxpayers earning over $250,000.

The provisions on estate taxes left me dumbfounded . . . I was expecting much harsher treatment. The only significant change is that the estate tax, if it applies at all, raises to a maximum of 40% from 35%. The exemption amount (the amount that an individual can leave “estate-tax-free”) stays at $5.12 million (and may even be going to $5.25 million after adjustments). That is $5.12 million EACH for Mom and Dad . . . and whatever one spouse doesn’t use at death can carry-over and be added to the surviving spouse’s $5.12 million. For almost all Americans, the estate tax is dead. The big relief for most affected people (and their lawyers and accountants) is that we have permanent rules . . . certainty after 12 years of up-and-down-and-all-around. No more wondering from year-to-year.

Print Friendly

Filed Under: General, Tax Issues Tagged With: 2012 Taxpayer Relief Act, elder law and taxes, Taxes

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Now Serving Charlotte

704.276.6446

Also the Triad from Asheboro

336.610.6000

Find Us

Get A Free NC Medicaid Nursing Home Rules Booklet

Mason Law Booklet Offer

Great tips from an expert!

Download Now

About Bob Mason

Bob Mason, Elder Law & Special Needs LawRobert A. Mason, JD, CELA, CAP, is owner of Mason Law, PC, of Charlotte and Asheboro, North Carolina, a law firm devoted exclusively to legal issues involving the elderly and the disabled. Read More >>

Robert A. Mason
Rated by Super Lawyers


loading ...

Browse Articles Here!

Or Search On A Topic

News

Mason named to 2022 Super Lawyers

Robert A. Mason named to Super Lawyers ASHEBORO, … [Read More...]

Mason Named 2021 Triad Lawyer of the Year in Elder Law

ASHEBORO, NC — Aug. 20, 2020: Best Lawyers® has … [Read More...]

Reader Favorites

Real Property Basics: Medicaid, Taxes, and Probate — CONTINUED

Real Property Basics: Medicaid, Taxes, and Probate — CONTINUED

In the last article, we looked at the general characteristics of various … [Read More...]

Real Property Basics: Medicaid, Taxes, and Probate

Real Property Basics: Medicaid, Taxes, and Probate

Understanding different ways of owning real estate is important because the … [Read More...]

Understand Capital Gains or It’ll Cost You

Understand Capital Gains or It’ll Cost You

Want to save a bunch of money? I’ll explain how here. But I’m warning you, … [Read More...]

  • Surprise! Your Medicare Premiums Might Go Up.
  • NORTH CAROLINA SPECIAL ASSISTANCE
  • STEP Act Might Step On You

© 2022 MasonLaw, PC | NC Elder & Special Needs Law Attorney · Rainmaker Platform