Last week we talked about some of the changes waiting on decisions being made in congress. We would like to continue this discussion this week by focusing a few more issues that we are all waiting to hear about. Just like the items last week, these are only guesses at what might happen.
- Taxes for Capital Gains My stay the Same. Tax on capital gains was expected to raise from the current 15% to 20%. However, a short-term extension of the current 15% maximum tax rate on these income items is anticipated.
- Changes of the Estate Tax. The Estate tax has changed rather regularly. In 2001, estates worth more than $675,000 were taxed at the 55 percent rate. Over the years, the threshold rose from $675,000 to $3.5 million, and estates worth more than that were taxed at the 45 percent rate. Starting in 2011, it was scheduled to return to 55 percent on estates worth over $1 million.
- Many of the Tax Breaks Should Stay in Effect. There are several deductions that were scheduled for change but will likely stay the same. They include deductions for sales tax, educators expense, college tuition and the extra standard deduction for taxes on your home if you can’t itemize.
- The Child Tax Credit Will Likely Change. The child tax credit has been $1000 per child under age 17, and is scheduled to be lowered to $500. It appears this will go into effect unless it is changed during the lame-duck session.
These are some of the issues that will be affecting many of you. Again, we don’t know that these changes will or will not take place; this is just what appears to be happening. We will not know for sure until the end of November. If you have concerns about your taxes please feel free to contact us and we can give you information about your specific situation.
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