Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Tax hikes ahead? Be prepared (Taxes in 2013 as Bush tax cuts expire)
Fidelity Investments ^ | Sept 7. 2012 | Fidelity

Posted on 09/07/2012 10:56:05 AM PDT by Innovative

The tax cuts enacted by Congress in 2001 and 2003 - often referred to as the Bush tax cuts - provided a broad range of tax relief, including lower tax rates on income, long term capital gains, and qualified dividends. We dodged the expiration of these lower taxes back in 2010 when Congress extended the tax cuts for two years (through 2012). Now cuts are set to expire on December 31, 2012, and any action will likely come down to the wire as it did in 2010.

It's difficult to predict what will happen, but three scenarios are possible:

All the tax cuts could expire if Congress and the president fail to reach an agreement before December 31. In this case, the new Congress could act in 2013 to reinstate some of or all the tax cuts.

The tax cuts could be extended temporarily, giving Congress time to act on a permanent solution—possibly by reforming the tax code.

Some type of compromise could be reached in the lame duck session, with some taxes extended or modified and others allowed to expire.

One area of uncertainty is income tax rates. Without action, the 25%, 28%, 33%, and 35% tax rates will increase, and the 10% tax bracket will go away.

The tax rates on long-term capital gains and qualified dividends, which are currently 15% (0% for taxpayers in the lowest two income brackets) are also set to change. Without Congressional action, the long-term capital gains rate would revert to 20% for most taxpayers and to 10% for those in the 15% income tax bracket in 2013. Qualified dividends, meanwhile, would go back to being taxed as ordinary income, so for some investors, the top tax rate could rise to 39.6%.

(Excerpt) Read more at 401k.fidelity.com ...


TOPICS: Business/Economy; Front Page News; Government; Politics/Elections
KEYWORDS: elections; obama; taxes; taxhikes

1 posted on 09/07/2012 10:56:11 AM PDT by Innovative
[ Post Reply | Private Reply | View Replies]

To: Innovative

Good luck.


2 posted on 09/07/2012 10:58:21 AM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Innovative

I’ll have to study this some more, but don’t think this will directly impact me much.


3 posted on 09/07/2012 11:08:13 AM PDT by DonaldC (A nation cannot stand in the absence of religious principle.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Innovative

“Now cuts are set to expire on December 31, 2012”

That’s OK. The US will cease to exist as a sovereign nation on Dec. 21, 2012. The new Islamic Socialist Republic of the Western Hemisphere will takes it’s place, with Valerie Jarret as Chairman Val.

Impossible? Tin-foil hat ? (women wearing female genital costumes are parading on NATIONAL TV in front of children, and people think I’m crazy)

Maybe. We’ll know soon.


4 posted on 09/07/2012 11:13:16 AM PDT by UCANSEE2 ( If you think I'm crazy, just wait until you talk to my invisible friend.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: stephenjohnbanker

The GOP should push to alter and simplify the AMT so that regardless of the number of deductions, credits, exemptions ... EVERYONE has to pay in at least the lowest tax rate on their taxable income.


5 posted on 09/07/2012 11:13:53 AM PDT by taxcontrol
[ Post Reply | Private Reply | To 2 | View Replies]

To: Innovative

They are the Obama tax cuts. He took ownership when he extended them.


6 posted on 09/07/2012 11:19:34 AM PDT by kabar
[ Post Reply | Private Reply | To 1 | View Replies]

To: taxcontrol

I agree. If half the country has no skin in the game,many will vote for a welfare POTUS, because it is in their interest to do so.


7 posted on 09/07/2012 11:35:11 AM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: DonaldC

Unless you pay no income tax, note the bottome rung eliminates the lowest bracket entirely. Next up, if married, the marriage tax is back....so much so that my wife and I agreed if the SOB manages to do that, we get a paper divorce and become cohabitating adults for tax purposes. I am not giving that Kenyan one sou more than I absolutely have to.


8 posted on 09/07/2012 11:51:42 AM PDT by Mouton (Voting is an opiate of the electorate. Nothing changes no matter who wins..)
[ Post Reply | Private Reply | To 3 | View Replies]

To: DonaldC
I’ll have to study this some more, but don’t think this will directly impact me much.

I'm glad it doesn't affect you much, but for most people who income, savings, or investments, it is a brutal tax increase.

9 posted on 09/07/2012 12:29:34 PM PDT by MrShoop
[ Post Reply | Private Reply | To 3 | View Replies]

To: taxcontrol

The AMT needs to die.


10 posted on 09/07/2012 12:30:25 PM PDT by dfwgator (I'm voting for Ryan and that other guy.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: kabar
They are the Obama tax cuts. He took ownership when he extended them.

There is a Democrat running for Senate in Indiana named Joe Donnelly. In the House he has a solid record voting for all the Obama programs. But in his campaign, he tries to come off as a "moderate". He has a commercial supporting continuing the "Bush tax cuts" LOL.

11 posted on 09/07/2012 12:33:59 PM PDT by nascarnation (Defeat Baraq 2012. Deport Baraq 2013)
[ Post Reply | Private Reply | To 6 | View Replies]

To: Innovative

Those of us who own small businesses had zero taxable profit this year, anyway, so what difference does it make?


12 posted on 09/07/2012 12:39:28 PM PDT by Mr. Jeeves (CTRL-GALT-DELETE)
[ Post Reply | Private Reply | To 1 | View Replies]

To: dfwgator

Once everyone is subject to the AMT .. it will die


13 posted on 09/07/2012 12:41:55 PM PDT by taxcontrol
[ Post Reply | Private Reply | To 10 | View Replies]

To: Innovative

Are you sure that the rate is 164% for qualified dividends above the 15% tax rate pre-2013? I bet it is a typo.


14 posted on 09/07/2012 12:50:56 PM PDT by crusty old prospector
[ Post Reply | Private Reply | To 1 | View Replies]

To: crusty old prospector

15 * 1.64 = 24.8 + 15 = 39.8


15 posted on 09/07/2012 12:55:14 PM PDT by nascarnation (Defeat Baraq 2012. Deport Baraq 2013)
[ Post Reply | Private Reply | To 14 | View Replies]

To: Innovative

Oh, I see. The number is white is supposed to represent the increase as a percentage. A thousand pardons.


16 posted on 09/07/2012 12:58:52 PM PDT by crusty old prospector
[ Post Reply | Private Reply | To 1 | View Replies]

To: Mouton

I a curious if one of you can claim head of household?


17 posted on 09/07/2012 1:01:24 PM PDT by ThisLittleLightofMine
[ Post Reply | Private Reply | To 8 | View Replies]

To: ThisLittleLightofMine

No...no kids here.


18 posted on 09/07/2012 1:08:19 PM PDT by Mouton (Voting is an opiate of the electorate. Nothing changes no matter who wins..)
[ Post Reply | Private Reply | To 17 | View Replies]

To: Innovative

Reference bump.


19 posted on 09/07/2012 3:07:00 PM PDT by Tunehead54 (Nothing funny here ;-)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Innovative

All this breathless news flash from your friendly fidelity financial advisor. And just what brilliant strategy do they suggest you take to make a dazzling response to this to realize your retirement dreams?

Factual but just useless.


20 posted on 09/07/2012 4:10:59 PM PDT by Sequoyah101 (Half the people are below average, they voted for oblabla.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: stephenjohnbanker

The Rinos and Obammy went in front of the judge, both claiming to be the adopted parent of the baby (the USA).

Since the judge did not know who the real parent was, he offered to cut the baby in half - one half for the Rinos and one half for Obammy. They decided to chop the baby because they could blame it on the judge.


21 posted on 09/07/2012 5:13:04 PM PDT by SaraJohnson
[ Post Reply | Private Reply | To 2 | View Replies]

To: Mouton

It’s a good idea. Is there a chart somewhere that would show me how much we’d save if we were single?


22 posted on 09/07/2012 5:38:21 PM PDT by Terry Mross (2016 THE MOVIE....scarier than any zombie movie.)
[ Post Reply | Private Reply | To 8 | View Replies]

To: Sequoyah101

“And just what brilliant strategy do they suggest you take to make a dazzling response to this to realize your retirement dreams?”

Very simple: VOTE REPUBLICAN!!! Romney, Republican House, Republican Senate.


23 posted on 09/07/2012 5:44:42 PM PDT by Innovative ("Winning isn't everything, it's the only thing." -- Vince Lombardi)
[ Post Reply | Private Reply | To 20 | View Replies]

To: Innovative

I intend to but if you think things are just as simple as that to rescue the fading future for retirement savings ... well.


24 posted on 09/07/2012 6:37:14 PM PDT by Sequoyah101 (Half the people are below average, they voted for oblabla.)
[ Post Reply | Private Reply | To 23 | View Replies]

To: Innovative; All

25 posted on 09/07/2012 6:41:12 PM PDT by musicman (Until I see the REAL Long Form Vault BC, he's just "PRES__ENT" Obama = Without "ID")
[ Post Reply | Private Reply | To 1 | View Replies]

To: MrShoop

I understand the death tax goes from affecting those with a $10 mill. estate down to a $1 mill. estate, and the tax rate is around 43%. Can someone verify this?


26 posted on 09/07/2012 6:43:28 PM PDT by Lizavetta (You get what you tolerate)
[ Post Reply | Private Reply | To 9 | View Replies]

To: Lizavetta
It is worse than that - the top rate for the death tax will jump to 60% in 2013.
n 2013, the death tax will revert to its antiquated, pre-2001 form. The applicable exclusion amount will plummet to $1,000,000, and the top marginal rate will leap twenty points to 55%. A 5% surtax will also return, to be levied on estates between $10 million and $17 million. This raises the top effective rate of the death tax to 60%.
source:http://atr.org/dont-die-confiscatory-percent-death-tax-a7051
27 posted on 09/07/2012 6:58:31 PM PDT by MrShoop
[ Post Reply | Private Reply | To 26 | View Replies]

To: Innovative

More money into sterile assets such gold, purchased with cash and unregistered, which can be passed on w/o estate tax. More underground economic activity. Of course, less government revenue.


28 posted on 09/07/2012 8:50:38 PM PDT by grumpygresh (Democrats delenda est; zero sera dans l'enfer bientot)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Lizavetta

I did some digging and found this.

Starting Jan 1, everyone will pay an individual obamacare mandate tax of $1360/year or 2.5% of your adjusted gross.
Plus a surtax on investment income for households earning 250K or more.
Cap gains go from 15 to 23.8%
Dividends go from 15 to 43.4%
Rents, royalties or other passive income goes from 35 to 43.4%
Tax rates set by Bush will expire and go back to clinton era rates.
There are 13,000 pages of NEW tax regulations
Standard deduction for married couples is cut in half.
child tax credit goes from $1,000 to $500 per child.
Death tax exclusion goes from 10 mil to 1 mil with a 55% hit on anything over that 1 mil.
No adjustments to the AMT
Business expensing will be spread out over years instead of expensing 1/2 in the first year.
AND add in all the new obamacare taxes and regs that haven’t been made public yet.

Yeah it’s coming, a real taxmaggedon.


29 posted on 09/08/2012 4:56:07 AM PDT by Texas resident (The demoncrat party will destroy us all.)
[ Post Reply | Private Reply | To 26 | View Replies]

To: Innovative

Doe anyone know if this is true? Could it be a part of obamacare?

Subject: HR 4646

A 1% tax on all bank transactions is what HR 4646.


30 posted on 09/09/2012 8:44:54 AM PDT by Terry Mross (2016 THE MOVIE....scarier than any zombie movie.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Terry Mross

Here is what Snopes says about it:

http://www.snopes.com/politics/taxes/debtfree.asp


31 posted on 09/09/2012 1:31:24 PM PDT by Innovative ("Winning isn't everything, it's the only thing." -- Vince Lombardi)
[ Post Reply | Private Reply | To 30 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson