We DO KNOW
According to Warren Buffet “All of America is waiting for Congress to offer a realistic and concrete plan for getting back to a fiscally sound path. Nothing less is acceptable.” We also know most people would agree with this statement. But, there is no agreement as to how to get this done. We do suspect, whatever happens will create tax mayhem!
We DO KNOW
Based on a letter from Steven T Miller, Acting Commissioner of the IRS, to The Honorable Sander M Levin, Ranking Member of the Committee on Ways and Means dated 11/13/2012 that “if there is no Alternative Minimum Tax (AMT) patch enacted by the end of the year the IRS would be forced to operate the 2013 tax filing season based on the expiration of the [previous] AMT patch. There would be serious repercussions for taxpayers.” He went on to say that if no patch is enacted about 28 million taxpayers would face a very large 2012 unexpected tax liability. His letter can be viewed at http://democrats.waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/Final_Response_Levin_37392.pdf
We DON’T know (and it’s a lot!)
- If the phase outs for personal exemptions and itemized deductions will be eliminated
- If the election to deduct state and local sales taxes instead of state income taxes will return
- If the AMT will be eliminated or if the exemption will be increased for 2012 and 2013
- If lower long term capital gains tax rates will be extended
- If the favorable qualified dividends treatment will be extended
- If the surtax on investment income (if your Modified Adjusted Gross Income exceeds $200,000 for single taxpayers and $250,000 for married couples filing jointly) will be repealed
- If the mortgage interest deduction will be diminished for certain taxpayers
Good news – WE DO KNOW(and it’s better than nothing!)
The IRS issued the 2013 mileage rates: Business rate is 56.5 cents/mile (up from 55.5cents/mile for 2012); Medical and moving rate is 24.0cents/ per mile (up from the 23cents/mile for 2012)
Because of all of the uncertainty it is more important than ever to be prepared to make some last minute transactions before the year ends. Stay Tuned!