Helping you understand the new tax rates

Marlen Rosales 300x107 Helping you understand the new tax ratesBy Marlen Rosales, CPA

What advice would I want to give you to prepare for the remainder of tax season, this year? First, and foremost, if you haven’t already, I would tell you to get your tax information to a tax preparer ASAP. Recently, there have been many delays in the finalizing of forms by the government agencies, this year. As a result, there is going to be, if there isn’t already, a flood of returns once the forms are finalized. You may already be in the flood. Avoid it to the extent possible.

Today we are going to touch on three items; capital gains rates, federal tax rates and qualified dividends rates. I am choosing to discuss them in one topic because they are interrelated.

For the top ordinary tax rate, long-term capital gain maximum tax rates have gone from 15% in 2008 through 2012, to 20% for the top rate of 39.6% in 2013 and after. For example, for Married Filing Joint, a tax bracket of 39.6% is taxable income of $450,001 and over. Any long-term capital gains would be taxed at 20%, instead of 39.6%, a savings of 19.6%.

For ordinary tax rates of 25% to 35%, the long-term capital rates have remained the same at 15% for 2013 and after. For example, for a Single individual, tax brackets of 25% to 35% are taxable income of $36,251 to $400,000. Any long-term capital gains would be taxed at 15%, instead of 25% to 35%, a savings of 10% to 20%.

For ordinary tax rates of 10% or 15%, the long-term capital rates have remained the same at 0%. For example, for Married Filing Joint, tax brackets of 10% and 15% are taxable income of $0 to $72,500. Any long-term capital gains would not be taxed, a savings of 10% to 15%.

To figure your tax bracket, you can look up your taxable income by finding it on line 43 on page 2 of your form 1040. If not, you can call me on my Research Hotline and I will assist you.

Similar to capital gains, qualifying dividends are ordinary dividends that qualify equally for the 0%, 15%, or 20% maximum tax rate that pertains to net capital gains discussed above.

Marlen Rosales is a Certified Public Accountant, and Founder and CEO of Certified Accounting Services in Antioch. She can be reached at 978-4484 or marlen@cascocpa.com. Learn more about her on LinkedIn at www.linkedin/pub/marlen-c-rosales-cpa/1/305/7b3

Share this:
email Helping you understand the new tax rates su Helping you understand the new tax rates digg Helping you understand the new tax rates fb Helping you understand the new tax rates twitter Helping you understand the new tax rates

the attachments to this post:

Marlen Rosales
Marlen Rosales


No Comments so far.

Leave a Reply

tensibly-interproportional