The Fiscal Cliff--Where We Could Be Stepping Off (To)

By
Real Estate Broker/Owner with Huntsman Properties CalBRE #01188996
At the end of 2012, depending on what happens between the political parties, there could be many expiring tax provisions that originated in the George W. Bush Administration, when 2012 was the sunset year for so many breaks.

Federal income tax rates are scheduled to increase in 2013, with tax brackets currently spread from 10%-35% changing to 15%-39.6%. Long term capital gains will increase from 15% to 20%, and other long term capital gains tax rates which apply to qualifying dividends will be taxed as ordinary income.

The 2% reduction in the payroll tax for Social Security will expire, something which concerns many businesses.

Estate taxes will return to 2001 and the $1,000,000 exclusion for taxes, and the top tax rate increases from 35% to 55%. (In 2001, there weren't nearly as many $1,000,000 properties to inherit as there are now.)

Earned income tax credits, child tax credit and the Hope tax credit will revert to lower limits.

Student loan interest will no longer be deductable after the first 60 months of repayment.

Have you been affected by the Alternative Minimum Tax? the exemption amounts will be lowered, affecting many more individuals (a tax that was only supposed to affect the highest income earners has been affecting more and more of the middle class). . . . Please continue to http://longbeachrealestate.blogspot.com/2012/12/the-fiscal-cliff-or-tax-breaks-that.html


Comments (2)

EMILIA B COOPER, REALTOR® SFR.NCHSE.AHWD
LAROSA REALTY - Orlando, FL
Short Sales, Foreclosure & Bank Owned Real Estate

Julia, great explanation, very intersting and we all need to know about fiscal cliff ... I appreciate it!

Dec 11, 2012 09:21 AM
Julia Huntsman
Huntsman Properties - Long Beach, CA
BPOR, CDPE, e-PRO, SFR, Broker

Hi Emilia, there's even more to it, all the tax ramifications are more lengthy, and are huge for many people, but for the "average" homeowner, it's likely we'll see some increase in our taxes next year.

Dec 11, 2012 10:44 AM