United States tax law is always changing. Some of the significant changes effective in 2013 are outlined below.

1) The highest regular tax rate on individuals has been increased to 39.6 %.
A 39.6% income tax rate now applies to taxable income over $400,000 for singles, $425,000 for heads of household and $450,000 for married couples filing jointly.

2) In addition there is a “Net Investment Income Tax” of 3.8% on taxpayers whose “Modified Adjusted Gross Income” also exceeds “THRESHOLD” amounts beginning at $200,000 for single tax filers and $250,000 for Married Filed Jointly. This tax is levied on the smaller of the filer’s net investment income or the excess of modified Adjusted Gross Income over the applicable dollar threshold. Investment income includes interest, dividends, payments of substitute interest and dividends by brokers, capital gains, annuities, royalties and passive rental income.

3) An additional Medicare tax of 9/10 of one percent is levied on taxpayers whose wages and/or self-employment income exceeds various “THRESHOLD” amounts, beginning at $200,000 for single tax filers and $250,000 for MFJ

If you are interested in tax planning for 2014 or would like more information regarding the effective changes you can contact us either by phone at 617-354-3814 or by e-mail at info@tylerlynchpc.com. You could also obtain other financial articles by visiting our website at www.TylerLynchPC.com/corner.