YOU PROBABLY DO A LOT OF PLANNING in your everyday life. You plan vacations, meetings, even trips to the grocery store. But how much time do you spend on income-tax planning? If you're like most taxpayers, you probably devote very little time to mapping out strategies for reducing your tax obligation. That may be a costly mistake.
The 2012 Tax Planning Guide looks at how federal tax law affects you and presents a variety of strategies that can help you reduce your personal and business taxes. The planning opportunities mentioned may or may not be appropriate for your situation, so be sure to obtain professional advice before acting on any of the general information presented in this guide.
WHAT'S NEW?
Unless the tax law is changed,* individual taxpayers can expect higher tax rates on ordinary income, capital gains, and qualified dividends after 2012. The top rate on ordinary income will be 39.6%, and the maximum rate on net capital gains generally will be 20%. Dividends will be treated as ordinary income.
Higher income individuals will once again be subject to reductions in personal exemptions and itemized deductions after 2012. A new surtax on investment income and an additional Medicare tax on earnings are also slated to take effect in 2013.
Contributions to a health flexible spending account (FSA) will be capped at $2,500 annually, starting in 2013.
The threshold for deducting unreimbursed medical expenses for taxpayers under age 65 rises from 7.5% of adjusted gross income (AGI) to 10% of AGI, starting in 2013.
* At the time of publication, Congress is beginning discussions on deficit reduction and economic stimulus measures, some of which might impact 2012 and later taxes.
This publication is an advertisement prepared by NPI for the use of the publication's provider. The provider and NPI are unrelated companies. The content is not written or produced by the provider.