2021 Tax Tips: A look at the Future
The end of the year always means the possibility of last-minute tax changes, and this year, that’s especially true. Some of the new legislation may mean major changes starting in the new year, but other proposed bills, such as new capital gains and qualified dividend tax rates, may take effect retroactively. And taxes on the wealthy may go up, too.
These possibilities make it difficult to plan with certainty. Specific provisions under consideration include those discussed here. Note that, if passed, these provisions are likely to be subject to certain exclusions and dollar limits:
Tax Changes Included in Congress’ Fiscal Cliff Legislation (January 1, 2013)
The following is a summary of the provisions included in Congress’ “Fiscal Cliff” legislation passed on New Year’s Day, which the President is expected to sign.
Tax rates beginning January 1, 2013
A top rate of 39.6% (up from 35%) will be imposed on individuals making more than $400,000 a year, $425,000 for head of household, and $450,000 for married filing joint.
2% Social Security reduction gone
AMT permanently patched
A permanent AMT patch, adjusted for inflation, will be made retroactive to 2012.
Dividends and capital gains
The Pease itemized deduction phase-out is reinstated, and personal exemption phase-out will be reinstated, but with different AGI starting thresholds (adjusted for inflation): $300,000 for married filing joint, $275,000 for head of household, and $250,000 for single.
The estate tax regime will continue to provide an inflation-adjusted $5 million exemption (effectively $10 million for married couples) but will be applied at a higher 40% rate (up from 35% in 2012).
The $1,000 Child Tax Credit, the enhanced Earned Income Tax Credit, and the enhanced American Opportunity Tax Credit will all be extended through 2017.
Oh, Holy Night
Wisemen gathered at the foot of the manger during a live nativity performance at the First Annual Christmas Nativity Festival in Burbank at the Church of Jesus Christ of Latter-day Saints earlier this month. The festival featured about 350 nativities and a live nativity. KKAJ staff accountant Daniel Holbrook, along with his wife and 3-month-old child, portrayed Joseph, Mary, and Baby Jesus. See more pictures on the Burbank Leader’s website
KKAJ has exploded this year, with five children or grandchildren born in six months! Congratulations to Bud Alleman, Tracy Odland, Evan Faucette, Mike Garrison and Daniel Holbrook for the new additions to their families! Now for the challenge: Match which baby goes with each parent or grandparent. Answers below.
Bud Alleman, Noon Lions Club treasurer and KKAJ partner, helped congratulate winners of the Lions Club International “Imagine Peace” poster contest at an awards ceremony in November at the Burbank Central Library. The posters were designed to portray the participant’s idea of peace.
Congratulations to winners Margo Akopov, Micayla Siemon and Tanishka Nair. Each winner received $25 and certificates from the Lions Club, City of Burbank, and offices of Representative Adam Schiff, State Senator Carol Liu, Assemblyman Mike Gatto, and Supervisor Michael Antonovich.