November 16, 2012
Michele Lipson, Tax & Business Services Partner, Article "Year-End Tax Update: The World as We Know It Is About to Change" Featured in the South Florida Hospital News
By Michele Lipson, Partner, Marcum LLP
Despite all of the uncertainty surrounding the Fiscal Cliff (the possible expiration of the 2003 tax cuts on December 31), one thing remains sure: we will all still have to pay taxes. Some fundamental changes to the current tax code will take effect on January 1. Following are some of the highlights to keep in mind for your 2013 financial planning.
- Income Tax Rates will increase from the current range of 10%-35% to 15%-39.6% in 2013.
- The current rate on Long Term Capital Gains will increase from 15% to 20%. One exception applies to assets that qualify as a 5-year capital gain, which will be taxed at 18%. A qualified 5-year capital asset is a long term capital asset held for more than 5 years and purchased after December 31, 2000.
- In 2013, there will no longer be a distinction in the tax rates between Ordinary Dividends and Qualified Dividends. Qualified dividends will be taxed at ordinary rates up to 39.6% rather than the current preferential long term capital gain treatment.