Greg Kyte on Your New Tax Rates

Imagine this – an accountant who’s both smart and funny. That’s Going Concern’s Greg Kyte. Here’s a snatch from his hilarious/helpful Fiscal Cliff post:

What taxes are going to go up? By how much?
  • Income tax rates will bounce back to their 2001 levels. The lowest bracket will jump from 10% up to 15%. The highest bracket will jump from 35% up to 39.6%. Everyone should expect about a 3 percentage point increase.
  • Employee-paid FICA (social security), will go back up to 6.2 percent. It’s been at 4.2 percent for the past two years. It’ll feel like the government’s giving you a big “FICA you!”
  • Capital gains rates will bounce up, too. For the vast majority of taxpayers, capital gains tax rates will increase from 15% to 20%. If you make less than $8,700, capital gains rates will go from 0% to 15%, so homeless people should liquidate their appreciated assets immediately.
  • The child tax credit is $1,000 per kid in 2012, but it will only be $500 per kid in 2013. The child tax credit is one way many taxpayers are able to write off their “gambling losses.”
  • The standard deduction for married couples (married filing jointly) will go down, so stop dragging your feet and get that divorce, you know, for tax purposes.
  • Right now qualified dividends are taxed at capital gains rates (maximum 15%). After the fiscal cliff they’ll be taxed at ordinary income tax rates (maximum 39.6%). Taxpayers are pissed because most of them don’t get any dividends.
  • The child and dependent care credit will go down by as much as $1,200 depending on your situation.
  • People who die in 2012 will get hit with a 35% estate tax on net worth in excess of $5.12 million. People who die in 2013 will get hit with a 55% estate tax on net worth in excess of $1 million. Because of this, financial planners are getting swamped with estate tax questions like, “Will you unplug that cord for me?” and, “Please step on this oxygen tube.”
  • There’s more, but no one would really expect you to know it.

LOL, the rest here:

The Fiscal Cliff: As a CPA, People Expect You to Know this Crap (Going Concern)

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