Now that tax-season is in the rearview mirror, it may seem that you paid more than normal – or that your usually fat refund lost a little of its girth this year.
Well taxes did go up – again. There are so many sneaky ways for our government to increase taxes … without increasing taxes … it can make your head spin. Unfortunately, 2013’s tax burden will only get worse in 2014. Here is a quick summary of tax changes for 2013 and 2014:
• The 10 percent tax bracket disappears
• 25% will become 28%; 28% will become 33%; and 35% will become 39.5%
• Personal exemptions and itemized deductions phase-out for high-income earners
• The standard deduction and the width of the 15 percent bracket shrinks
• Dividends no longer qualify for lower, long-term capital gains rates
• Long-term capital gains tax rates increase from 0 percent to 10 percent (for taxpayers in the 15 percent bracket) and from 15 percent to 20 percent for the rest of us
• The child credit is halved to $500 and becomes largely non-refundable
• The child and dependent care credit and the earned income credit are pared back
• The 3.8% Obamacare Tax marches on
• The AMT (Alternative Minimum Tax) will snare more taxpayers in its clutches
• The Estate Tax reverts to pre-2001 levels
• A Medicare payroll tax surcharge of .9% applies to high-income earners
• Medicare Premiums go from $105 to $336 for high-income earners
If all that detail is hard to digest, consider this. In the Federal Budget, our government projects that it will collect $1.316 trillion in income taxes in 2013. By 2018 – just five years out – that figure will swell by almost 50%, to 1.920 trillion – all without an official “tax increase.” Go figure.
The news only gets worse as we continue to rack up trillion dollar federal deficits year after year; large cities declare bankruptcy, and personal income goes backward.
It’s time to get serious about managing our individual future tax liabilities – and we can show you how.
