Key Changes in Tax Laws for 2013

A registered investment advisor who works in the state of Washington, Wayne Demeester is a principal in Blue Skye LLC and a co-founder of Definitive Advisors, LLC. Wayne Demeester offers a range of wealth management and retirement planning products and services for clients, including tax planning. He keeps his clients informed on important changes in tax laws, such as those that are occurring in 2013.

With the expiration of the Bush-era tax cuts, Congress has passed new legislation that revises the tax code for 2013. A new 39.6% tax rate applies to single tax filers earning over $400,000, or head-of-household filers earning in excess of $425,000. The 39.6% rate also applies to married couples who file joint returns with a combined income over $450,000, or with an income exceeding $225,000 if they file separately. This new tax rate represents a 4.6% increase from the previous year.

Higher income taxpayers can also expect other changes. There are new surtaxes on investment income, as well as additional healthcare-related taxes. For persons making more than $200,000, an additional .9% will be assessed for Medicare taxes. For individuals with unearned income exceeding $200,000, or for married couples filing jointly and earning more than $250,000, a 3.8% Affordable Care Act surcharge will be assessed. Additionally, some high-income earners may also be affected by reductions in personal exemptions and itemized deductions in 2013.