Posts Tagged ‘ATRA’

Tax Rules Extended by ATRA

January 12, 2013

The American Taxpayer Relief Act of 2012 provides “taxpayer relief” primarily by extending tax benefits that were scheduled to expire. Here is a list of the extensions that are of most interest to individual taxpayers. Changes labeled “permanent” can be altered by an Act of Congress but will not expire automatically.
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ATRA Tax Rates for Capital Gain and Dividends

January 12, 2013

The American Taxpayer Relief Act of 2013 (“ATRA”) made important changes in the way long-term capital gain and qualified dividend income are taxed. Here’s an explanation, in Q&A format.

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Qualified Charitable Distribution Transition Rule

January 11, 2013

The American Taxpayer Relief Act of 2012 (ATRA) extends the tax treatment of qualified charitable distributions from IRAs, so that they are available for 2012 and 2013. Because this law wasn’t enacted until January 2013, it includes a special transition rule. You can take advantage of this rule retroactively for 2012, but only if you act before the end of January 2013.

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CCH Gets Political?

January 4, 2013

“The new law effectively raises taxes for all wage earners (and those self-employed) by not extending the 2012 payroll tax holiday that had reduced OASDI taxes from 6.2 percent to 4.2 percent.”

We were surprised to see this statement in a release from CCH, which is generally known for highly accurate, and studiously nonpolitical, reporting of tax developments. It’s well known that the payroll tax holiday was always intended as a temporary measure that would expire when the economy was in recovery. An extension of this measure was never part of the fiscal cliff discussions leading to enactment of the American Taxpayer Relief Act of 2012 (“ATRA”).

The suggestion that ATRA was somehow responsible for terminating this measure has become a talking point for conservatives who want to pretend that the law raises taxes on middle income taxpayers. CCH dropped the ball in permitting a misleading, partisan statement in one of its normally neutral tax reports.

ATRA Expands Roth Conversions

January 3, 2013

Our book Go Roth! lists eight ways the availability of Roth retirement accounts has increased since 2005. The American Taxpayer Relief Act of 2012 (“ATRA”) adds another. Beginning in 2013, if permitted by your employer’s plan, you can convert an existing 401k, 403b or 457b account to a Roth account, even if you aren’t eligible to take a distribution.

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ATRA Fix for Alternative Minimum Tax

January 3, 2013

The American Taxpayer Relief Act of 2012 (“ATRA”) permanently fixes the alternative minimum tax, or AMT, indexing it for inflation and preventing it from disallowing certain personal credits. The practical effect of this fix is to maintain, and permanently preserve, the status quo. It means the impact of the AMT in future years will be essentially the same as it has been in the past.
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ATRA Tax Increase or Tax Cut?

January 3, 2013

The American Taxpayer Relief Act of 2012 (“ATRA”) is being described by many (including both Republicans and Democrats) as a tax increase of more than $600 billion. At the same time, from a different perspective, it’s a tax cut — and one of the largest in history.

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ATRA Tax Rates

January 2, 2013

The American Taxpayer Relief Act of 2012 (“ATRA”) affects income tax rates for 2013 and subsequent years. These rates do not sunset, so they will not change (except for inflation adjustments) until Congress passes legislation amending the tax law.

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