US Tax Code Changes affect New York Residents

February 28, 2013

Any new year is going to bring changes to the national tax code. What changes will determine what your Rochester accountant will need to do when filing your documents. Rizzo DiGiacco Hern and Baniewicz came upon a statement that New York’s higher income earners may not feel as pinched as other states. The report occurred a few weeks ago once the final workups for avoiding the fiscal cliff were announced. The new deal is going to include changes to the tax code meaning individuals who make more than $400,000 or couples earning more than $450,000 are going to be placed in a higher tax bracket. It may seem worrisome for those with a higher income faced with a higher tax bracket, but research into the matter by a Rochester CPA shows most people are not going to see a significant difference. Typically New Yorkers in a high income tax bracket are in the alternative minimum tax meaning they are paying a minimum tax than what the actual or effective tax rate should be. New York is at least promising the tax bracket is not going to be as high as in other parts of the US. The Rochester CPA stated the area most affected is going to be with capital gains and dividends. The hike is from 15 percent to 20 percent. It will change how most do those investments as a means of minimizing the tax they pay. A few of the new tax laws might also affect whether some marry or just stay as a couple. In terms of taxes a single person may pay a higher rate, but they will still pay less than a married couple earning the same amount together.

New York residents are going to be affected by some of the changes to Rochester taxes such as the social security changes. Congress cut back on individual contributions to social security. The rate has increased to 6.2 percent thus you will have less as a take-home amount. The changes can seem worrisome on the individual level, not to say the commercial level since these changes can affect entrepreneurs who wish to start a new business. Less cash coming in from the current job means longer saving up for the business idea.

Whether you have questions on the new tax increases, tax planning or are worried about this year’s tax season there are accountants who can help. Do not let this tax season surprise you by waiting until the last minute to start filing. It is already mid-February and starting to edge towards March. It means we have roughly two months to get taxes in, prepared, and sent in for those refunds. If you owe taxes you may not want to rush, but the sooner you know what you are facing often times it is better. It takes a stressor out of your already busy life to know what to plan for and the additional expenses you might need to account for when you owe.

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