All of the printed information and major news telecasts have addressed the "what" as it relates to the American Taxpayer Relief Act of 2012. Of greater importance to people, specifically higher net worth business owners, is the "now what do I do?"
There are many moving parts with this new law. An article by NFP explains possible income and estate tax strategies to consider under the new law. Major tax changes:
Health Care / Payroll Taxes
- 3.8% Medicare tax on net investment income
- 0.9% increase in Hospital Insurance (HI) tax on wages
- 2% increase in Payroll taxes
Income Taxes
- 39.6% top income tax rate
- 20% top rate on long-term capital gain and qualified dividends
- Expanded retirement planning
- Personal exemption phase-out and limits on itemized deductions
Transfer Taxes
- Higher rates
- Same exemption, inflation-adjusted
- Reunification and portability made permanent
- State estate tax deductions
Further explanation and example strategies.
I have spoken with many business owners and we work together to create the best strategy for their organization and their personal finances. Please contact me to discuss the best strategy for yourself.
