Your browser does not support JavaScript

Our Promise To You

We provide a comprehensive view of your financial life and all the factors that go into life planning. What this means to you is help with personal decision making and putting a date on things. We help you manage your finances and investments, while taking into consideration tax planning, professional moves, children, retirement, healthcare and other important priorities. It’s about life planning and gaining more comfort with your long-term financial security.
 

Blog & News

American Taxpayer Relief Act of 2012 – Last Minute Tax Law Changes
Posted By: 
Wednesday, September 17, 2014

Rob Lemmons, CFP®, CPA, AIF®, CEPA

As in typical government fashion our legislative bodies waited to the last minute of the last hour to pass the American Taxpayer Relief Act of 2012 (ATRA). The new legislation, effective beginning in 2013, extends the majority of the tax cuts that were set to expire at the end of 2012 and in addition retroactively reinstates a number of tax rules that expired in 2011. These changes are permanent with no sunset provision in place. We thought it was prudent to inform you of the more notable changes to the law.
As more of the details are made available, we will be communicating relevant information and incorporating the new laws into our proactive tax planning.
Proactive tax planning throughout the year is the key to reducing taxes over your lifetime and maximizing your after-tax dollars for wealth accumulation. This is accomplished by applying changing tax laws to your specific situation.

What Are the Changes?

Income Tax Brackets

The top tax bracket increases from 35% to 39.6%, and applies to taxable income above $450,000 for married couples filing jointly, $400,000 for individuals, and $425,000 for head of household filers. All other individual tax rates remain the same (10%, 15%, 25%, 28%, 33%, and 35%).

Capital Gains and Qualified Dividends

For those taxpayers in the 15% and 10% marginal bracket, they will continue to pay 0% on long-term capital gains and qualified dividends. Taxpayers in the 25% – 35% marginal brackets will be subject to 15% tax on long term capital gains and qualified dividends. Those taxpayers in the highest 39.6% marginal bracket will be subject to a 20% tax on long term capital gains and qualified dividends. It is important to keep in mind that those taxpayers subject to the 20% tax rate will find their net investment income subject to the new 3.8% Medicare surtax. Insert link to Obama care blog

Estate and Gift Tax

The estate and gift tax exclusion is $5.12 million in 2012 ($5.25M for 2013) for individuals with a permanent portability provision allowing a total of $10.24 million for married couples. The exclusion amount will increase each year indexed for inflation. However, the tax rate for taxable estates exceeding the threshold will be 40%.

Phaseout of Itemized Deductions and Personal Exemptions

This law is reinstated beginning in 2013. The phaseout for itemized deductions reduces total itemized deductions by 3% of the excess over the Adjusted Gross Income threshold of $300,000 for married couples filing jointly and $250,000 for individuals.
The personal exemptions phaseout reduces personal exemptions by 2% of the total exemptions for each $2,500 of excess income over the threshold amounts of $300,000 for married couples filing jointly and $250,000 for individuals. Both laws are permanent and indexed for inflation.

Alternative Minimum Tax (AMT)

The exemption amount for AMT is patched for 2012 and made permanent. The AMT exemption for 2012 will be $78,750 for married couples filing jointly and $50,600 for individuals. These amounts will be indexed for inflation in the future.

New Roth Conversion Flexibility

This is an entirely new addition to the law. It allows individuals to convert their existing 401(K) plan to a Roth 401(K) plan, if the employer offers a Roth 401(k) option under the employer plan. This new rule is extended to not only 401(k) plans but includes 403(B) and 457 plans as well.

IRA Charitable Rollover

The law extends a provision until December 31, 2013 allowing for a qualified charitable distribution from a traditional IRA to an eligible charitable organization. The provision has a cap of $100,000 annually and is eligible to those individuals who are 70 ½ or older.
Tax planning is complex and requires the guidance of a trusted and experienced advisor, such as a fee-only Certified Financial Planner™ (CFP®), who plans comprehensively, and with a complete understanding of your particular concerns and goals in life.
For more information about the quiet millionaire® approach, please visit us at www.twpteam.com or contact Rob Lemmons, CFP®, CPA, AIF at 513-984-6696.



 
 
Subscribe To Our Blog

Blog Categories

  • In the News
  • Business Owners
  • Charitable Planning
  • Client Experience
  • College Planning
  • Estate Planning
  • Executive Compensation
  • Firm Updates
  • Investments & Market Updates
  • Retirement Planning
  • Security & Privacy
  • Taxes
    • 10/27/2020 - 2020 Year End Tax Planning Str
    • 04/28/2020 - High Income Professionals Can
    • 03/26/2020 - Coronavirus Stimulus Package -
    • 01/24/2020 - 2020 Major Tax Law Changes
    • 12/23/2019 - 2019 Year End Tax Planning Str
    • 10/16/2019 - Ohio Homestead Exemption
    • 05/30/2019 - Increasing Taxable Income as a
    • 04/18/2019 - Why You Should Provide Your Ta
    • 02/12/2019 - Reducing Your Real Estate Taxe
    • 12/04/2018 - Payments to the IRS through "D
    • 08/01/2018 - Value of Roth Conversions
    • 06/18/2018 - Charitable Gifts from your IRA
    • 04/27/2018 - The Tax Saving Power of a Heal
    • 12/21/2017 - Tax Cuts and Jobs Act of 2017
    • 11/03/2017 - 2017 Year End Tax Planning Str
    • 10/19/2017 - Tax Preparation is not Tax Pla
    • 09/17/2014 - 2013 Obamacare Taxes for High
    • 09/17/2014 - American Taxpayer Relief Act o
  • Financial Planning
 

INVESTMENT
MANAGEMENT

Our investment management process is focused on helping you maintain financial stability, preventing mistakes and accomplishing your investment objectives. We don’t just focus on market performance or predictions. We focus on what performance means and how it impacts your long-term goals. It starts with returns, but it is about making life decisions. Working together, you gain a degree of confidence when uncertain times come.

Learn More
 

RETIREMENT AND
TAX PLANNING

We help you determine how long to work and when to retire to continue your lifestyle. We analyze when and how to take money from your portfolio to replace your paycheck, with an eye on tax efficiency, spending, healthcare and social security maximization. We address the primary concern of having your money last for the rest of your life.




Learn More
 

HOLISTIC/COMPREHENSIVE
PLANNING

Our comprehensive planning focuses on real life. It’s putting a date to your goals and steering your life based on analysis, giving you choices and alternatives. You gain the ability to see how reachable your goals are. It starts with getting to know you and the way you want things done to fulfill your needs. We take into consideration your family and all the secondary factors that go into a comprehensive financial plan.


Learn More

WE'VE BEEN LISTENING
FOR OVER 30 YEARS

Total Wealth Planning’s team of Certified Financial Planners® are here to listen to you and your questions. We never want you to feel rushed. The real benefit is having a road map to help ensure the key elements of your financial life are in order.


Total Wealth Planning Associations
WE ARE PROUDLY ASSOCIATED WITH

CONTACT INFO


 

WHAT'S NEW AT TWP


       
CORPORATE EXECUTIVES

FAMILIES

PRE-RETIREES / RETIREES

BUSINESS OWNERS

DISCLOSURES
ECONOMIC OUTLOOK

BLOG & NEWS

VIDEO LIBRARY

FORM CRS
   
4665 Cornell Rd. Suite 160, Cincinnati, OH 45241 4665 Cornell Rd. Suite 160, Cincinnati, OH 45241
513-984-6696 513-984-6696
info@twpteam.com info@twpteam.com
2021 Annual Retirement Contribution Limit Changes
Wednesday, November 25, 2020


SEE MORE >

Follow us on Google+
Blog & News
Follow us on Twitter
Find us on Facebook
DISCLOSURES | COPYRIGHT © 2020. TOTAL WEALTH PLANNING. ALL RIGHTS RESERVED.
GET STARTED
READY TO
GET STARTED?