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Joseph Perry, Partner-in-Charge, Tax & Business Services, Featured in Bloomberg Article "Top Earners Set to Pay Most Especially Married People"

Featured: Joseph Perry, Partner-in-Charge , Tax & Business

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U.S. taxpayers with income of more than $200,000 a year will see federal tax rates rise this year on wages and investments. Tax increases will pinch married couples faster than individuals, especially if both spouses work and have capital gains and dividend income, said Joseph Perry, partner- in-charge of tax and business services at the accounting firm Marcum LLP.

In the law passed by Congress Jan. 1, multiple thresholds for higher rates kick in for married couples only $50,000 above where they hit for singles. Married taxpayers with income of at least $300,000 also face limits on the value of deductions and personal exemptions that were reinstated for 2013.

"If they're sending a message, it's not to be married," Perry said of U.S. tax policy. "People who are married, working, earning two good salaries, are being penalized."

The budget deal struck by Congress and new taxes stemming from the 2010 health-care law are exacerbating the long-established marriage penalty for high earners. The added bite will affect taxes they pay for 2013, and not the current filing season that starts this month.

Accountants and wealth advisers are recommending that high earners start planning and strategizing about how they recognize income from investments or when they take deductions.

Consider a couple living in New York state with each earning $280,000 in annual wages - for a combined $560,000. The couple will pay about $22,000 more in taxes this year if they are married filing jointly than if they were single, according to an analysis by Perry. That assumes each of them has $20,000 in capital gains and dividends as well as $35,500 each in deductions for charitable contributions, mortgage interest and real estate taxes.

As a married couple, more of their income is subject to the phase-outs on personal exemptions and limits on itemized deductions as well as the higher taxes on wages and investment income from both the health-care law and budget deal.

"They made it worse because of where they set the brackets," Perry said of the marriage penalty as it applies to high-earning, married couples.

Click here to read the full article on www.Bloomberg.com >>

 
Featured
Joseph Perry

Partner-in-Charge
Tax & Business
Melville, NY
 
 
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