|
|
|
Isaacson Isaacson
Sheridan & Fountain, LLP
101 W. Friendly Ave., Suite 400
Greensboro, NC 27401
(336) 275-7626
|
|
|
|
|
Greetings!
Isaacson Isaacson Sheridan & Fountain, LLP sends out periodic emails with news and updates about legal issues and about our firm. We hope you find this information useful. If you prefer not to receive these emails, please click on SafeUnsubscribe below. Of course, please email or call us if you would like to discuss any of these matters.
The following alert is from Desmond Sheridan.
Attention Turns to Income Tax Rate in Second Half of 2010
The Bush tax cuts of 2001 and 2003 reduced federal income tax rates across the board, but particularly for high earners. However, due to a budgetary rule in effect at this time, the tax cuts were "temporary." This means, if nothing is done, tax rates will automatically increase in 2011 for almost all taxpayers. That is, rate would return to 2000 levels. This means (among other things) that capital gains would be taxed at 20% and dividends would no longer receive a special (lower) rate.
The Obama administration has proposed letting the top bracket rates rise, while keeping the lower bracket cuts intact. This plan would require Congressional action. This chart summarizes what could happen:
|
President Bush's Tax Cuts |
Where President Obama Stands | |
|
| |
Personal income taxes |
Personal income taxes | |
· Reduced income tax brackets to:
o 35 percent from 39.6 percent (In 2010, this includes married couples with more than $373,650 in taxable income)
o 33 percent from 36 percent ($209,250 - $373,650)
o 28 percent from 31 percent ($137,300 - $209,250)
o 25 percent from 28 percent ($68,000 - $137,300)
· Expanded the 15 percent bracket ($16,750 - $68,000.00)
· Created a 10 percent bracket (up to $16,750)
|
Allow the tax cuts to expire only for couples earning more than $250,000 and individuals earning more than $200,000 - about 2 percent of American households. The top two income tax rates would revert to 36 percent and 39.6 percent. | |
Dividends and capital gains |
Dividends and capital gains | |
Lowered the top rate to 15 percent on taxes paid by stockholders on corporate dividends and the taxes on capital gains. In 2003, the rate was 39.6 percent for dividends and 20 percent for capital gains. |
Restore the 20 percent rate on capital gains. Taxpayers in the top two brackets would also pay 20 percent on dividends. |
Note that high business income earners will be paying an additional .9% Medicare tax in 2013 on top of the current 2.9% rate. Investment income earners (in 2013) will also be paying a new 3.8% Medicare tax. This means top bracket taxpayers will be paying as much as 43.4%.
If Congress does nothing (which seems a distinct possibility) rates will be rising for almost everyone. If Congress acts, it will likely be to limit the rate increases to earners over $250,000. |
About the Writer
Desmond G. Sheridan is a partner in the Greensboro law firm of Isaacson Isaacson Sheridan & Fountain, LLP and is a certified public accountant. His practice areas are business transactions, tax, corporations, limited liability companies, commercial real estate and estate planning. Sheridan has served on the Board of Directors of the North Carolina Association of Certified Public Accountants and has been recognized as a "Best Lawyer in America," a North Carolina "Super Lawyer" and a member of the "Legal Elite" by Business North Carolina. He has given numerous continuing education presentations to CPAs and attorneys. |
|
Some disclaimers: First, nothing in this email should be construed as legal advice. Second, an attorney-client relationship may only be established by a formal engagement with our firm. Third, this email is informational only; you should not act on any legal matters except with the specific advice of your counsel.
| |
|
Our Firm Isaacson Isaacson Sheridan & Fountain, LLP101 W. Friendly Ave, Suite 400 Greensboro, North Carolina 27401 336-275-7626
336-273-7293 fax
|
|
Click on the name below to email the writer.
| |
|
|
|
|
|
|
|
