Why your tax bill might surge next year

In a recent tax planning meeting with one of our clients, we shocked them with what their income tax future looked like for 2013 if -- on the off-chance -- Congress continues to do nothing to provide a long-term permanent set of tax laws.

• Dividends taxed at capital gains rates removed, taxed at regular rates now

• Capital gains low tax rates expires

• Child care deduction limit of $3,000 reverts to $2,400

• Low 10% tax bracket for low income Americans is eliminated

• Lower income tax rates and smaller brackets expires

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DangerClose said:

http://finance.yahoo.com/taxes/arti...iz?mod=taxes-advice_strategy#mwpphu-container



The list is a lot longer, but I didn't want to post the entire article. One of the most interesting ones to me is the lowest tax bracket would expire. That is at 10%. It was created by the Bush tax cuts. If that expires, the people in the lowest bracket will go up to 15%. That's a 50% tax increase.

Anyone who thinks the Bush tax cuts only helped the rich, here's what happens when they expire.

The comment section there is fun reading. I laughed at this one:

They sent my Tax Return back! AGAIN!!! In response to the question:
"List all dependents?" I replied ,....
"12 million illegal immigrants;
"3 million crack heads;
"42 million unemployable people on food stamps,
"2 million people in over 243 prisons;
"Half of Mexico ;
and "535 fools in the U.S. House and Senate."
Apparently, this was NOT an acceptable answer.

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