It’s complicated. But, complicated or not, it’s going to affect everyone – especially Boomers and Seniors.
The American Taxpayer Relief Act of 2012 was actually passed by the Senate in 2013…at 2 a.m. on New Year’s Day. After speculation on New Year’s Day on whether Speaker Boehner would bring the bill to a vote – or if the House would add amendments likely be rejected by the Senate – the House eventually passed the bill at 10:45 p.m. And President Obama signed it the next day.
The bill addresses the Bush-era tax rates, estate and gift tax rates, Medicare reimbursement, and the sequester, among numerous other issues.
TAX RATES: The bill permanently extends current tax rates for individuals earning less than $400,000 and couples earning less than $450,000. Those earning more will see an increase from 35% to 39.6%. Wealthy folks will see an increase from 15% to 20% on capital gains and dividends. Individuals earning above $250,000, and married couples earning more than $300,000, will see a phase-out of the personal exemption.
ESTATE TAX: The estate tax exemption will remain $5.12 million per person, but will be adjusted for inflation. The top rate will grow from 35% to 40%. Portability’s extended, as well, and the gift tax exemption will remain at $5 million.
PAYROLL TAX: This tax, which funds Social Security, has been at 4.2% since 2011, but will now revert back to the previous of 6.2%.
“DOC FIX”: This provision prevents the scheduled 27% reimbursement cuts to Medicare physicians this year.
OLDER AMERICAN FUNDING: Funding has been increased for the Older Americans Act and similar programs. This year only, Area Agencies on Aging will receive an additional $7.5 million, and Aging and Disability Resource Centers an additional $5 million.
The National Center for Benefits and Outreach Enrollment will receive an additional $5 million, and Medicare State Health Insurance Programs will receive an additional $7.5 million.
As I said…it’s complicated. But we can help.
At the Law offices of Alice Reiter Feld & Associates, we’ve been advising South Florida families on financial issues for 33 years. We’ve helped thousands of them, with proactive measures to see them through any legislative changes. And we help secure their futures, with comprehensive estate planning, wills, trusts, powers of attorney, long-term care planning, asset-protection plans, and assistance with Medicaid and the VA.
We can help protect you and your family. We’re just a phone call away.
The Fiscal Cliff Has Been Avoided – For Now – Part 1