American Business Owners and the Nation’s Top Income Earners Are about to Get Crushed with New Tax Law Changes:
There’s Little Time Left, but End-of-Year Tax Help with Big Savings is Still Available
Significant tax changes are taking place and most American Business Owners or high net-worth individuals are likely not even aware of it. With less than one month remaining to actually do something actionable about saving money and paying fewer taxes to the government, The Tax Saving Professionals are offering a free and remarkably valuable tax saving webinar.
Sebastian, Florida…”Many, if not most American’s have no idea what the tax implications are to their bottom line this year,” says Ray Phair, Chief Operating Officer of The Tax Saving Professionals. “People are going to be shocked and it will be too late for them to do anything about it, unless they act now, there is less than 30 days left in the year do actually do something meaningful and valuable to help save money on your taxes this year,” says Phair, whose company has helped more than 7000 clients nationally since 1998 save more than half a billion dollars in taxes.
“If you are a business owner, a high net worth individual, a high-income earner, and you haven’t been paying attention to what is going on with the new tax laws and changes, you are going to be shocked, and not in a good way,” says Phair, “unless of course you don’t care how much money the government is going to be taking from your income?”
According to Phair, “there are many, many high-income taxpayers now who are finding they are facing tax rates in excess of 50 %, high-income earners are seeing a combination of federal tax increases for 2013.” Among a host of others, here are just a few new startling tax facts that will impact Americans’.
- Top marginal rate of 39.6 %, an increase from 35 %
- 20 % tax on long-term capital gains and dividends; an increase from 15 %
- 3.8 % tax on investment income
Most businesses have been paying quarterly estimated taxes based on their liability for 2012 which is fine according to the IRS and the “safe-harbor” rule, which still applies, according to Phair.
Where you are located in the country also impacts on your new tax rates and tax structure. In California, the “new” top rate is 13.3 % on income exceeding $1 million.
High-Net Worth Individuals will be Hit Hard
High net-worth and “wealthy” individuals are going to feel more than a little pinch to their pocketbooks, but more like the big arm of government swooping in to help themselves to a huge handful of cash to their bottom line.
For example, the rate on long-term gains and qualified dividends can be up to 25 %. That’s a 67 % increase from 2012.
Moreover, the rate on other investment income such as royalties, interest and rents can exceed 43 %.
The reach of these new tax laws stretch across the country to the other coast. New York is another prime example of a state where the “well-to-do” will be getting a gigantic governmental wallop to their wallet.
The Facts for married New Yorkers:
- Married $600,000 in wages,
- $100,000 in qualified dividends
- $300,000 in long-term capital gains
- $145,000 in itemized deductions
While New Yorker’s might generally be more accustomed to pay more for their Starbucks Double Espresso’s and higher taxi cab fares, residents of the Big Apple will pay 17 %, or $37,000, more in U.S. taxes this year.
Lawmakers also reinstated phase-outs of personal exemptions and itemized deductions for adjusted gross income exceeding $250,000 for individuals and $300,000 for married couples.
Good News, Bad News
On the one hand, observes Phair, the good news for investors is that this year’s stock market rally, specifically the Standard & Poor’s 500 Index is up 25 % through October. The bad news however, is that these new tax laws will have serious tax implications for many investors with mutual funds that pay dividends. “When the dust begins to settle on this come next year, this could end up being the catalyst for another recession,” says Phair, “especially as it affects business owners, when all of this hits the economy and small business owners are paying more in taxes than they expected, that means there is less to invest in people, property, inventory; costs to operate business are skyrocketing, not to even mention what’s going on with healthcare, business owners and the wealthy are (going) to get hammered, and that is not going to be good for the working people of this country or the economy.”