Tax Savings Ideas for High-Income Individuals

The purpose of the Act as detailed below is for the most part directly affecting higher income taxpayers this article intends to expedite the information for their ease of planning to reduce their tax to a maximum possible; for lower income individuals, we will present in our next article publication The enactment of the Tax Relief Act of 2012, P.L. 112-240 allows better opportunities for the rather higher income individuals to take steps for reducing their 2013 income tax. The legislation has also revived the 39.6 percent tax bracket for higher income individuals, revived the personal exemption phase-out and limitation on itemized deduction (known as “Pease” limitation, a term taken from Congressman Pease.), increased the maximum tax rate on qualified dividends and capital gains, and made many additional changes. Also Patient Protection and Affordable Care Act, P.L. 111-148, adds as well two other elements needed to be factored into the year-end planning by higher-income taxpayers for the first time in 2013: the Net Investment Income (NII) surtax and the new Additional Medicare Tax. Observation: The combination effect of both higher tax rate increase and deduction limitation for the target-benefits phase-out results in more bites these target taxpayers; and, to prevent … Continue reading