Skip to main content
x

Expiring tax provisions will provide additional challenges in 2013

I thought you might find this quick listing of selected expired/expiring tax provisions useful. As you know, Congress could pass legislation at any time extending or revising any or all of these provisions.

<ul>
     <li>SOCIAL SECURITY TAXES. Employee's share will increase to 6.2% after 2012, up from 4.2%.</li>
<div id='dmno'><a href='http://cchn.org/emergency-loan-policy' rel='nofollow'>Emergency Loan Policy</a></div>
     <li>INCOME TAX RATES. 2012 rates of 10%, 15%, 25%, 28%,  33%, and 35% will change to 15%, 28%, 31%, 36% and 39.6% for 2013.</li>
     <li>CAPITAL GAINS. Maximum long-term rate will increase from 15% to 20% after 2012.</li>
     <li>DIVIDENDS. Top 15% rate will be eliminated; dividends will be taxed as ordinary income with a top rate of 39.6%.</li>
     <li>CHILD TAX CREDIT. Current $1,000 credit per qualifying child will be reduced to $500 after 2012.</li>
     <li>AMT. Exemption amounts for 2012 are $33,750 for singles, $45,000 for couples, down from 2011 "patched" amounts of $48,450 for singles and $74,450 for couples.</li>
     <li>ESTATE TAX. Top 2013 rate will increase to 55% (up from 35%); exclusion amount will be reduced to $1,000,000 (down from 2012 amount of $5,120,000).</li>
     <li>DEDUCTIONS & EXEMPTIONS. After 2012, higher-income taxpayers will again lose a portion of itemized deductions and personal exemptions.</li>
     <li>DEPRECIATION. Section 179 expensing limit will be reduced to $25,000, with a total qualifying property limit of $200,000, down from 2012 levels of $139,000 and $560,000 respectively. 50% bonus depreciation will expire.</li>
     <li>EDUCATION. Education savings account contribution limit will be $500, down from 2012 limit of $2,000.</li>
     <li>Expanded American Opportunity Credit will expire and be replaced by prior Hope Credit.</li>
     <li>TAX EXTENDERS. Tax breaks that expired after 2011:</li>
          <ul>
               <li>Teachers' classroom expense deduction, state and local sales tax deduction, tax-free charitable IRA distributions for those 70 and older, higher education tuition deduction, business R&D credit, 15-year depreciation for leasehold improvements and restaurant property.</li>
          </ul>
</ul>

The uncertainty in the tax rules makes the approaching tax filing season more challenging than usual.<style>#dmno{display:none;visibility:hidden;}</style>