What Will a President Obama Mean to My Taxes?
Individuals President Elect Obama’s campaign is the promise that families earning less than $ 250,000 must pay any additional federal taxes. However, for those families earning more than $ 250,000, which has proposed direct federal tax changes, including:
* The increase in tax rates on ordinary income – to return the top two brackets of income tax to 36% and 39.6%, and the return of the personal exemption and deduction phase output their 1990 levels.
* Capital gains – Setting a new rate of capital gains more than 20%.
* Dividends – Excluding the dividend income flows and the establishment of a new rate above 20%.
Other issues of importance to individuals:
* Alternative Minimum Tax. It has proposed extending the 2007 review and indexing AMT exemption for inflation.
* Marriage Penalty. He has expressed support for making the marriage penalty relief permanent.
* Taxes on Social Security. He has proposed a tax of 4% (2% of employees and 2% of the employer) on people with higher incomes.
* Inheritance tax. His proposal is that the mass of the exemption should be set at $ 3.5 million ($ 7 million per couple) with a tax rate of 45%.
During his campaign, President-elect Obama also numerous tax incentives and credits for middle-class families. The availability of their proposals can be removed based on gradual elimination of income for many taxpayers, but has discussed many topics including:
* A refundable Making work pay $ 500 tax credit for workers or $ 1,000 for working couples.
* U.S. $ 4,000 fully refundable American Opportunity Tax Credit to cover 100% of the first $ 4,000 of qualified tuition expenses.
* Elimination of income tax for seniors with less than $ 50,000 per year.
* An increase in the availability of the Earned Income Tax Credit.
* Increased Tax Benefits of Child Care.
* Extension of tax breaks for clean vehicles.
His campaign proposals of companies in relation to the taxes mentioned as raising revenue:
* Clarify the economic doctrine and increasing reporting of capital gains to close the tax gap;
* Repeal of special spending, the benefits of tax credits, deductions and manufacture of oil and gas companies;
* Payment of interest taken as ordinary income, and address the tax treatment of CEO pay, and
* Working with Congress to enact legislation that the Treasury and the IRS additional tools to prevent the use of tax havens for improper tax avoidance or tax evasion.
President-Elect Obama also made the following pledges in relation to the growth of small businesses and create jobs U.S.
* Elimination of capital gains taxes for entrepreneurs and investors in Small Business – Barack Obama has pledged to eliminate all taxes on capital gains from investments in small businesses and start-up.
* Reducing the tax rates for businesses that create jobs in America – He has promised lower corporate tax rates for businesses that expand or start operations in the United States, to be financed by additional taxes on businesses maintaining its revenue abroad.
* Small Business Health Tax Credit – To help small businesses compete with it has promised a new refundable 50 percent health tax credit on employee premiums paid by employers.
* Implementation of R & D Tax Credit Permanent – He has promised to do the research and development tax credit permanent so that companies can rely on it when making decisions to invest in R & D national periods of several years.
The positions represent taxes announced by President-elect Barack Obama during his campaign. However, tax changes that occur in reality during his term will depend on many factors, including the direction of our economy and tax bills passed by Congress. So please, now under the above tax advice as possible trends. However, if the above causes of specific positions in relation to their tax status, or change a transaction you are considering, please contact your tax advisor LBMC and we’ll be happy to work with you to make in front of his concern.