President Obama has signed into law via autopen a bill intended to avert the much-publicized fiscal cliff. The “American Taxpayer Relief Act of 2012”, which was passed with overwhelming support from both the House and Senate on New Year’s Day, includes many significant tax provisions such as an increase in income tax rates as well as the phase out of exemptions and itemized deductions for families who make over $450,000 per year. However, those who earn less than this amount will not be completely spared from the tax increases as the 2 percent reduction in payroll taxes, which has been in place for the past two years, will not be extended in the bill. Other significant provisions in the bill include the permanent indexing of the AMT exemption for inflation as well as an adjustment to the top estate, gift and GST rate from 35 to 40 percent.
For more details on the tax provisions included in the bill, please click on the link below or contact your GBQ tax representative.
*Thank you to Andy Nentwich, Tax Senior, for his contributions to this post.