TMTW # 80 – Watch Out! 2013 Taxes are Coming!

Tax and Money Tip of the Week
Watch Out! 2013 Taxes are Coming!
February 8, 2012 | No. 80

Little publicized, effective and starting in 2013, as a part of the Patient Protection and Affordable Care Act of 2010, enacted March 23, 2010, there will be a new tax of 3.8% applied to “net investment income” in excess of $200,000 ($250,000 for married filing joint return).

Net investment income is defined as investment income less allocable expenses.

Investment income includes income from Interest, Dividends, Annuities, Royalties, Rents, and net Capital Gains from the Disposition of Property (unless property used in Trade or Business that is NOT Passive Activity).

We had done some projections for a client with a large capital gain in 2013 and beyond and will apply in those situations unless the law is changed by Congress before the end of this year. Also, the long term capital gains rate will rise to 20% in 2013.

Good tax planning will require proper timing of capital gains which could save thousands of dollars in tax.

Give us a call to discuss further how we can save taxes if you are in this situation.

Questions or Comments?
You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

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