As one year wound down and a new year began, we found ourselves peering over the so-called "fiscal cliff", but after a frenetic 48 hours, Congress reeled the country back up with the passing the American Taxpayer Relief Act of 2012 (the Act) in the closing hours of January 1st. The Act was quickly signed into law by President Obama the following day and a host of new tax laws became a reality.
A number of changes stem from the Act, including the permanent extension of lower rates for individuals with income under $400,000. This Legislative Update provides a brief overview of those provisions that are likely to have the most significant impact on our clients.
If you have any questions about how the Act may specifically impact you or your business, please let us know. We would also like to take this opportunity at the dawn of a new year to thank you for the opportunity to work beside you for another year. Here’s to 2013!
Significant Individual Provisions of the Act
New Income Tax Bracket
The rate brackets remain as they have been for the past 10 years, adjusted annually for inflation with the six existing tax rates – 10, 15, 25, 28, 33 and 35 percent – having been retained. However, beginning January 1, 2013, the Act imposes a new 39.6 percent bracket on taxable income above the following thresholds: