A couple things to point out on this comparison graph of tax changes from 2012 – 2013
- The brackets all increased by inflation so you could make a bit more and not move to higher bracket
- You would have to see your adjusted taxable income (net after deductions) go beyond $400k ($450k joint) before that 39.6% rate kicked in. Remember this is NET, not gross income.
- If you are in the 15% tax bracket making NTI of < 36k, you pay 0% on LT cap gains. And you can make up to $200K (250k joint) NTI and still pay the 15% cap gains tax as before.
- Yes estate tax went up from 35% to 40% but it only matters to those with estates > 5.35 Million and probably none of those people are reading this blog.
- Payroll tax is FICA and it went back to 6.2% from the two year vacation whereby it was 4.2%. This was a crappy idea anyway cause now it feels like a tax increase when it was a gift in the first place.
- Limitations on itemized deductions only apply to those with NTI >$250k ($300k joint).
- Nothing was done to the ATM tax which is a shame.