• A 3% limitation on itemized deductions over a certain Adjusted gross income (AGI) threshold ($250,000 single, $300,000 married filing jointly)

• A personal exemption phase out for taxpayers over a certain AGI threshold ($250,000 single, $300,000 married filing jointly)

• The limitation on itemized medical expenses will increase to 10% of AGI for taxpayers age 64 or younger

• Estates and trusts with taxable income of $11,950 or more will have a new marginal income tax rate of 39.6%

• For estates and trusts, the 3.8% Net Investment Income (NII) surtax applies to the lesser of undistributed NII or the excess of adjusted gross income over $11,950

• For 2013, the maximum Section 179 expense deduction is $500,000 that will begin to phase out when asset additions exceed $2 million; for 2014, the maximum deduction decreases to $25,000 with a phase out beginning when asset additions exceed $200,000

Tax Laws Set to Expire at Year-End

Some popular, but temporary, tax incentives known as "extenders" are scheduled to expire after 2013. Whether Congress will extend them again is questionable. While all have their supporters, Congress appears likely to take an extremely budget-conscious approach toward any tax provision it may consider, in addition to being divided on most tax issues in general. Some of the tax laws set to expire include:

• State and local sales tax deduction

• Teachers' classroom expense deduction

• Exclusion of cancellation of indebtedness on a principal residence

• Mortgage insurance premiums

• IRA distributions to a charity

• Bonus depreciation

• Work Opportunity Tax Credit

If you have any questions regarding the American Taxpayer Relief Act, please contact our office. We can schedule an appointment to discuss how the changes in the new law may affect your tax position.