Maco & Associates
News You Can Use
March 2013

In This Issue
Returns Status
Fiscal Cliff Update
Resources on our Website
Tax Tips
Check our website throughout the year for Tax Tips, IRS forms, tax calculators, and other helpful links.
Client Portal

Don't forget - you can send your files to us via email or through our client portal:

Important Tax Season Updates

It's time to update our clients on a few important matters!
Business & Personal Returns Status...
Good news! The IRS has finally released all business forms so the focus of our efforts is to catch up on business returns for the next two weeks.  
Personal returns will be sporadic over the next few weeks, but we're ahead of the game since we weren't able to work on business returns for some time. However, only 55% of our clients have submitted their personal returns to date. Those who haven't will experience longer lead times as we're working on business returns right now. 
Please be patient and please submit all information to us by April 1, 2013. We also request that we not receive a ton of requests for status updates. We are working on all returns on a first in and first out basis, and answering status questions only delays the work.
Fiscal Cliff Update...

Back in January, Congress approved the American Tax Payer Relief Act to avert a fiscal cliff. This legislation has some impacts that our clients should be aware of.


39.6% Tax Bracket 

For the 2013 tax year and beyond the Bush-era tax cuts have been extended, except for those making above $400,000 ($450,000 for families / $425,000 for heads of households). Their marginal tax rate increases to 39.6%, meaning that income above these levels will be taxed at 39.6%. Nevertheless, taxpayers who find themselves in this tax bracket will benefit from the extension of the Bush-era tax rates below that level. 


20% Capital Gains Tax   

For the same income thresholds, the rate for capital gains and dividends goes up to 20% (from 15%). Incomes below those thresholds are still taxed at the former 15% rate. The 0% rate still applies for those with income below $72,500 for joint filers and $36,250 for singles).


"Pease Provision" 

The "Pease provision" (named after the congressman who introduced it) is an old limitation that has now resumed under the fiscal cliff bill. It puts into play limitations on itemized deductions based on income over $300,000 for married couples and $250,000 for singles. This affects 2013 and beyond. Taxpayers with adjusted gross incomes above the threshold are taxed on an extra amount equal to 3 percent of the excess income over the threshold. So if a couple has $800,000 of adjusted gross income, Pease adds in an extra taxable amount of $15,000 (3 percent of the $500,000 excess income) on which the couple pays $5,940 of extra tax if they're in the 39.6 percent bracket. 


Personal Exemption Phaseout 
In 2013, personal exemptions start to phase out for incomes over $300,000 for married couples and $250,000 for singles. This means that the total amount of exemptions that may be claimed by a taxpayer is reduced by 2% for each $2500 by which the taxpayer's adjusted gross income exceeds these thresholds.

Cancellation of Indebtedness 

Cancellation of indebtedness on principal residences has been extended for one year, through 2013. This excludes from income cancellation mortgage debt on a primary residence of up to $2 million.

After April 15, please feel free to contact us so you are not surprised by higher tax bills next year. Planning up-front might help mitigate problems!

Call us at 610-489-7215 or email us at  


- Maco & Associates