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New CCH Tax Briefing Examines American Taxpayer Relief Act

RIVERWOODS, Ill., Jan. 2, 2013 /PRNewswire/ -- With the tax side of the fiscal cliff narrowly averted, CCH has issued a new Tax Briefing: American Taxpayer Relief Act, covering provisions of the new legislation.

The American Taxpayer Relief Act allows the Bush-era tax rates to sunset after 2012 for individuals with incomes over $400,000 and families with incomes over $450,000; permanently "patches" the alternative minimum tax (AMT); revives many now-expired tax extenders, including the research tax credit and the American Opportunity Tax Credit; and provides for a maximum estate tax of 40 percent with a $5 million exclusion. The Act also delays the mandatory across-the-board spending cuts known as sequestration. President Obama said that he will sign this legislation as soon as it reaches his desk.

Individuals with incomes above the $450,000/$400,000 thresholds will pay more in taxes in 2013 because of a higher 39.6-percent income tax rate and a 20 percent maximum capital gains tax. And, all taxpayers will find less in their paycheck in 2013 because of what the American Taxpayer Relief Act did not include: 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 on earned income up to the Social Security wage base ($113,700 for 2013). 

"The American Taxpayer Relief Act is nowhere close to the grand bargain once envisioned by the President and many lawmakers, but it's a major plus for taxpayers that the 2001 and 2003 tax act changes have finally been made permanent after years of uncertainty," said CCH Principal Federal Tax Analyst, Mark Luscombe, JD, LLM, CPA.  "Effectively, it's a stop-gap measure to prevent the onus of the expiration of the Bush-era tax cuts from falling on middle income taxpayers. Congress must still address sequestration. And, Congress is likely to revisit tax policy and spending cuts when it tackles the expected increase on the nation's debt limit in February."

CCH's Tax Briefing: American Taxpayer Relief Act is available by clicking here. Visit CCHGroup.com/Legislation to access the full range of CCH Tax Briefings on significant tax developments. Members of the press interested in speaking to a CCH tax analyst should contact Eric Scott at 847-267-2179, eric.scott@wolterskluwer.com or Brenda Au at 847-267-2046, brenda.au@wolterskluwer.com.

About CCH, a Wolters Kluwer business

CCH, a Wolters Kluwer business (CCHGroup.com) is a leading global provider of tax, accounting and audit information, software and services. It has served tax, accounting and business professionals since 1913. Among its market-leading solutions are The ProSystem fx® Suite, CorpSystem®, CCH® IntelliConnect®, Accounting Research Manager® and the U.S. Master Tax Guide®. CCH is based in Riverwoods, Ill. Follow us now on Twitter @CCHMediaHelp. Wolters Kluwer (www.wolterskluwer.com) is a market-leading global information services company. Wolters Kluwer is headquartered in Alphen aan den Rijn, the Netherlands. Its shares are quoted on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices.

SOURCE CCH, a Wolters Kluwer business

About PR Newswire
Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

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