2013 brought several changes to the American taxpayer. These changes were brought about by the deal to end the fiscal cliff standoff. According to the Tax Policy Center, these changes will affect approximately 90% of taxpayers from the billionaires to the paupers; the ultra-rich will experience an increase in taxes by as much as $121,000 for the current year income while the average household will see an increase by $2,000 for 2013. It is safe to assume that your Rochester taxes (i.e., inclusions and deductions) will not escape unscathed, so to speak. Let’s take a closer look at the impact of these tax reforms on your own tax planning direction. Keep in mind that, even with the best Rochester CPA on your side during tax season, it still pays to know what, why and how these changes will affect your cash flow, among other things.
Any increase in taxes is the bane of taxpayers for obvious reasons but these changes are also perceived as a necessary evil. As for your Rochester taxes, you can expect the following increases in your tax bill for the year covering 2013: • Personal exemption increase from $3,800 to $3,900 • Earned Income Tax credit, which is applicable for taxpayer with 3 or more dependent children, increase from $5,891 to $6,044 • Alternative Minimum Tax (AMT) increase from $78,750 to $80,800 for married individuals and from $50,600 to $78,750 for single taxpayers
But that’s not all either. The payroll tax cut will expire in 2013, which means that increases in tax will happen. For example, if your household earns $40,000 to $65,000 in yearly income, your taxes will increase by $672 on average by 2013. If your household has a $108,000 yearly income, you can expect to pay $1,950 or more. Again, you must discuss the implications on your Rochester taxes with your Rochester accountant. Keep in mind that the best Rochester consulting firm – Rizzo DiGiacco Hern & Baniewicz, of course -employs professionals with a wide range of experience who can look at both sides of the tax reforms and then make the changes work to your advantage.
It must be emphasized that, like all aspects of the modern-day economy, increasing the taxes will affect not just the taxpayers but the public and private sectors as well. The impact on job creation appear to be unfavorable at this point because the most-affected taxpayers are the small businessmen, which so happen to be the primary job creators in the country. Think of it this way: When your job prospects are getting dimmer by the day, you cannot be expected to pay your Rochester taxes because you don’t have income on which to base your levies on! The slower economic growth brought by the increase in taxes will also slow down job creation. The silver lining in the dark clouds: These may just be conjecture at this point since 2013 is still in its first quarter. The tides may change and follow the vision espoused by President Obama. For now, you are well advised to take a closer look at the possible impact of the changes on your Rochester taxes. Get the best Rochester accounting in on the task for a better understanding.
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