fbpx

IRS Rules: .9% Additional Medicare Tax In 2013

With Obamacare kicking into to full speed here in 2013, last week I blogged about the 0% long-term capital gains tax. With so many different tax law changes happening, my fear is some tax-payers aren’t planning correctly and will get stung with an extra bill come tax time. For those individual filers who make more than $200,000 modified adjusted gross income (MAGI) and married couples making more than $250,000 MAGI, it is really important to understand how the additional .9% Medicare Tax will be collected here in 2013. Will your payroll company do this for you? Will you have to do it yourself? Is there a special form to fill out this year? Here it is straight from the IRS Website- BTW, this was about 46 different questions and answers, but I trimmed down the key items for you. (Source for all questions: www.irs.gov) When does Additional Medicare Tax start? Additional Medicare Tax applies to wages and compensation above a ...

Read More →

Capital Gains On Your Primary Residence?

If you sell your main home or primary residence, up to $250,000 may be excluded from your income.  The amount jumps up to$500,000 for married couples that sell their primary residence. In order to meet the primary residence exclusion requirement you must meet the following requirements: You owned the residence for any two of the last five years. You occupied your residence for any two of the last five years. You haven’t used the capital gains exclusion within the last two years. If you are married you need to meet the following requirements: You are married and file a joint return for the year. Either you or your spouse has owned the residence for at least two out of the last five years. Both you and your spouse have used the home as your principal residence for two out of the last five years. Neither you nor your spouse has used the tax exclusion within the last two years. The required 2 years ...

Read More →

Did the health care bill just crush my taxes?

Scotty, beam me up!   I say this because after reading through the health care bill the taxes that are coming to pay for the plan will make you feel like you are in outer space. If you are high wage earner or a small to medium size business owner that is doing well, now will be the time to begin thinking about your overall tax management plan as your future income taxes could end up skyrocketing to the tune of 60%!  I don’t think people fully realize yet that some tax hikes are in this bill while others are already in motion, and I believe more to come within the next year. First, the top tax rates are scheduled to revert to the 36% and 39.6% number where they were a few years ago from the 33% and 35% number that they are today. (source: www.irs.gov)  If you are in the highest bracket that means you just took a 4.6% ...

Read More →

So you wanted to have a child?

Over the last few months, I have noticed an interesting pattern happening among newly married couples. These are the young early 30’s couples who spend their 20’s growing their incomes, dining and entertaining like it was going out of style, and most importantly getting the American Dream (at least in their head) of having a $500,000 home with all of the toppings. These couples seemingly had nothing that could stand in their way of financial success. ...

Read More →