The Tax Wave Tsunami
Third Wave: The Alternative Minimum Tax (AMT) and Employer Tax Hikes
. When Americans prepare to file their tax returns in January of 2011 - the AMT won't be held harmless, and many tax relief provisions will have expired. The major items include: ...The AMT will ensnare over 28 million families, up from 4 million last year. ...According to the Tax Policy Center, Congress' failure to index the AMT will lead to an explosion of AMT taxpaying families-rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers. Small business expensing will be slashed and 50% expensing will disappear. ...Small businesses can normally expense (rather than slowly-deduct, or "depreciate") equipment purchases up to $250,000. This will be cut down to $25,000. Larger businesses can currently expense half of their purchases of equipment. ......In January of 2011, all of it will have to be "depreciated." ...Taxes will be raised on all types of businesses. ......There are literally scores of tax hikes on business that will take place. The biggest is the loss of the "research and experimentation tax credit," but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs. ...Tax Benefits for Education and Teaching Reduced. ......The deduction for tuition and fees will not be available. ......Tax credits for education will be limited. ......Teachers will no longer be able to deduct classroom expenses. ......Coverdell Education Savings Accounts will be cut. ......Employer-provided educational assistance is curtailed. ......The student loan interest deduction will be disallowed for hundreds of thousands of families. ...Charitable Contributions from IRAs no longer allowed. ......Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA. ......This contribution also counts toward an annual "required minimum distribution." This ability will no longer be there. ...Healthcareinsurance will be INCOME onW2's! ......Starting in 2011,W-2 tax forms sentout by employers will be increased to show the value of whatever health insurance you are given by the company. ......Retired?Gross will go up by the amount of insurance you get. ......You will be required to pay taxes on a large sum of money that you have never seen. Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your tax debt. That's what you'll pay next year. ......For many, it also puts you into a new higher bracket so it's even worse. How is the government is going to buy insurance for the 15% that don't have insurance:REVENUE OFFSET PROVISIONS-(sec. 9001, as modified by sec. 10901) Sec.9002 "requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employees gross income." Effective January 1, 2013 sell a property PAY A FEDERAL TAX of 3.8% on gross sales price. Does notmatter if you make a profit on sale it is on GROSS not net.There are no guarantee that the 3.8% won't be increased in later years.
IT'S ALL ABOUT THE TAXES.
www.e-Wealth.comThe Tax Wave Tsunami
By: Bernard Wachter
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