Posts tagged Tax Law Updates
Planning for Retirement Accounts – More Senate Action on the Stretch IRA

Last year in this Blog I wrote about the efforts of Sen. Max Baucus (D-Mont.) to limit the ability of non-spouse beneficiaries of IRAs to stretch out withdrawals over their lifetime. Presently a non-spouse beneficiary can enjoy years, if not decades, of tax deferred or tax free growth on inherited IRAs (traditional or Roth). Last week, the Senate took up this cause again in relation to its efforts to fund the extension of low interest rates on student loans.

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The American Taxpayer Relief Act

Lake Superior State University recently released its “2013 List of Banished Words” and the phrase receiving the most votes was “fiscal cliff.” I would probably join most of you in agreeing that if anyone else “doubles down” on the folks in Washington D.C. “kicking the can down the road” on the “fiscal cliff” again I might just scream.

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2012 Year End Planning – Don’t Let Your Carriage Turn Into A Pumpkin

We all remember from the story of Cinderella how she was given a great opportunity to attend the Prince’s ball, but that the magic would wear off at midnight. With just over two months left in 2012, this year appears to be the estate planning equivalent of the Cinderella story. Under current law, before the clock strikes midnight on December 31, every American can transfer up to $5.12 million free of federal gift, estate and generation-skipping transfer tax. If Congress does not act by the end of this year, the exemption in 2013 will be just $1 million. This exemption, when coupled with historic low interest rates and valuation discounts, mean families can transfer significant assets at little or no tax.

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Health Care Surtax Goes Into Effect on January 1

Now that the health care law has been declared constitutional, one little known provision will go into effect on January 1, 2013. This provision is a new 3.8% investment income surtax, also called the health care surtax or the Medicare tax. The health care surtax will be assessed on the lesser of a) net investment income or b) the excess of modified adjusted gross income (MAGI) over the “threshold amount.” There are several steps you can take this year to help you reduce or avoid the amount of surtax beginning in 2013.

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Estate Tax Battle and the Family Farm

Josh Rolph, director of international trade, farm policy, taxation and plant health for the California Farm Bureau Federation stated in a recent article in AgAlert: "The message we have sent to Capitol Hill is that the estate tax unfairly hits farm estates due to the way the assets are held and the intrinsic value placed in maintaining the family farm."

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New Estate Tax Proposal

Jim McDermott (D-WA), a member of the House Ways and Means Committee, introduced HR 3467 the “Sensible Estate Tax Act of 2011”. According to a press release by Congressman McDermott: “This legislation will take us back to an estate tax that worked during one of America’s most prolonged periods of economic prosperity. It provides the kind of certainty that practitioners and taxpayers have been calling for since the Bush tax cuts took effect. Never in our history has an exemption increased over 500% in less than a decade and known loopholes been left open for abuse. The estate tax is broken, and it’s time we fix it.”

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