Fredrick Tax LLC

7101 15th Ave. S.

Richfield, MN 55423

(by appointment only)

info@fredricktax.com

952-215-2234

---

Crowdfunding & Taxes

Get your tax questions
answered today

---

---

Web services by

Affiliates

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 Level	2012 Federal Tax Rate	New 2013 Tax Rate	Percentage Increase
Up to $17,400	10%	15%	+5%
$17,401 - $70,700	15%	15%	0%
$70,701 - $142,700	25%	28%	+3%
$142,701 - $217,450	28%	31%	+3%
$217,451 - $388,350	33%	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:

• The child tax credit will drop from $1,000 down to $500.
I wish they weren't called the Bush tax cuts. If they were called somebody else's tax cuts, they'd probably be less likely to be raised."
- President George W. Bush
• The social security "Payroll Tax Cut" (which dropped an employee's social security tax from 6.2% to 4.2%) will expire, causing everyone's taxes to increase up to 2%.
• Capital gains taxes will increase for everyone. The 0% bracket moves up to 10%, and the 15% bracket moves up to 20%.
• Many other increases include things like estate tax, AMT rules, education credits, personal exemptions, etc.

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