The “Fiscal Cliff” was avoided by the passage of the American Taxpayer Relief Act of 2012 on January 2, 2013. Many provisions within this bill provide relief to American taxpayers (individuals and business) starting with the 2012 tax year. Below is a summary of several of the key provisions in this bill. Please consult with your tax preparer as soon as possible to determine which of these provisions will affect or benefit you.
Tax Rate Increases for Higher Income Taxpayers
For tax years beginning after 2012, the income tax rates for most individuals will stay at 10%, 15%, 25%, 28%, 33% and 35%. However, a 39.6% rate applying for income above $450,000 for joint filers and surviving spouses; $425,000 for heads of household; $400,000 for single filers; and $225,000.