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Tax News - September 3rd, 2012

We keep you informed about the tax laws that affect your current AND future tax circumstances.

Everyone's Taxes Are Going Up

Did you know that if Congress and the President don't agree to change the tax laws by the end of THIS YEAR, then everyone's taxes will go up? The "Bush Tax Cuts" that went into effect in 2001 lowered the tax rate for every single American, regardless of your income. It was an across the board tax cut.

Our tax system is built on a marginal tax rate design. That means that each bracket of money that you earn is taxed at different percentages based on how much you made. As you make more money, the government takes a higher percentage of it. The chart below shows what the current "Bush Tax" rates are, and what all the rates will increase to on January 1st, 2013, once these "Bush Tax Cuts" expire.

Federal Tax Rates for Married Filing Jointly Status
Income Level2012 Federal
Tax Rate
New 2013
Tax Rate
Up to $17,400 10% 15%+5%
$17,401 - $70,700 15% 15%0%
$70,701 - $142,700 25% 28%+3%
$142,701 - $217,45028% 31%+3%
$217,451 - $388,35033% 36%+3%
$388,351 or more 35% 39.6%+4.6%

As the above table illustrates, even if you are in the very lowest tax bracket, your taxes will be going up. And this is just the "Bush Tax Cuts" part! There are many more tax increases that kick in January 1st. Some include:

All of these little increases add up! Let's hope that our elected officials can act.

Past Articles

9/27/2016 - Crowdfunding & Taxes

10/18/2014 - Lebron James and State Income Taxes

10/14/2013 - The INDIVIDUAL MANDATE Law Under Obamacare

1/14/2013 - Fiscal Cliff PARTIALLY Averted for Current Tax Payers

9/3/2012 - Everyone's Taxes Are Going Up