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Possible tax brackets 2013
03-07-2012, 10:10 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Chicago
Posts: 1,154
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Possible tax brackets 2013
No 10% bracket. 15% bracket ends at $59,300. 28% bracket goes from $59,300 to $143,350. Standard deduction drops from $11,900 to $9,950. Personal exemption stays current at $3,800. This of course is for married couples filing jointly. How does this help folks out there?
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03-07-2012, 10:16 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Mar 2004
Posts: 3,433
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Quote:
Originally Posted by ripper1
No 10% bracket. 15% bracket ends at $59,300. 28% bracket goes from $59,300 to $143,350. Standard deduction drops from $11,900 to $9,950. Personal exemption stays current at $3,800. This of course is for married couples filing jointly. How does this help folks out there?
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Do you have them for singles, too?
omni
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03-07-2012, 10:17 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Where does this come from? Is there a link? Is this a particular proposal out there? Or is this just the removal of the "Bush tax cuts"? Even those who want them to lapse usually don't want them to revert to higher taxes below the current 28% bracket.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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03-07-2012, 10:17 AM
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#4
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Moderator Emeritus
Join Date: May 2007
Posts: 12,901
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Source?
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03-07-2012, 10:19 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,139
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Oh - I didn't know about the standard deduction dropping. I guess I forgot it had been raised as part of the "Bush Tax Cuts".
Do you have a reference for this information?
This all looks like the automatic reversion to the tax code in place before the temporary "Bush Tax Cuts" - things like 25% tax bracket becoming 28%, etc.
__________________
Retired since summer 1999.
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03-07-2012, 10:25 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Quote:
Originally Posted by audreyh1
This all looks like the automatic reversion to the tax code in place before the temporary "Bush Tax Cuts" - things like 25% tax bracket becoming 28%, etc.
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I think that's all this is. But in reality there is very little desire in Washington to revert to higher taxes for those now in the 25% brackets and below. The political question is whether making the middle class tax cut permanent -- which everyone wants -- will be held up by a demand to permanently extend *all* the tax cuts all the way up the ladder.
My guess? They agree to kick the can for two more years, yet again. Agreeing to kick the can is just about the only thing they *can* agree on.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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03-07-2012, 10:26 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Chicago
Posts: 1,154
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Quote:
Originally Posted by audreyh1
Oh - I didn't know about the standard deduction dropping. I guess I forgot it had been raised as part of the "Bush Tax Cuts".
Do you have a reference for this information?
This all looks like the automatic reversion to the tax code in place before the temporary "Bush Tax Cuts" - things like 25% tax bracket becoming 28%, etc.
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This is what current law calls for if bush era tax cuts expire. You can research on the internet. I just googled....possible tax scenario 2013....various sites will come up. I also went to....mytaxburden.com...and plugged in some numbers.
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03-07-2012, 10:29 AM
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#8
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,499
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I generally try to minimize my worries and fears concerning things I can do nothing about and that also are not yet certain. There is plenty to worry about that is already a done deal.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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03-07-2012, 10:33 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Chicago
Posts: 1,154
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Quote:
Originally Posted by omni550
Do you have them for singles, too?
omni
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0 to 35,500 at 15%. 35,500 to 86,000 at 28%. Standard deduction at 5,950.
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03-07-2012, 10:38 AM
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#10
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Chicago
Posts: 1,154
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Gee, that 30 year mortgage which will still keep me in the 15% tax bracket looks even better if current tax policy reverts back.
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03-07-2012, 10:48 AM
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#11
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Recycles dryer sheets
Join Date: Sep 2010
Posts: 95
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Guess that means I have less room for converting IRA to Roth in 2013.
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03-07-2012, 10:51 AM
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#12
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Posts: 3,681
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So for the 10% bracket folks, the tax rate would go up 50%. Ouch.
I'll believe it when it's official.
__________________
Married, both 69. DH retired June, 2010. I have a pleasant little part time job.
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03-07-2012, 10:58 AM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2011
Posts: 8,409
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I was waiting for this to come up but didn't think it would for another six months!
The above reference is if (big IF) the "BTCs" go away.
Two cents:
1) If so, is anyone planning on a higher withdrawal at the end of THIS year? (see 2 &3)
2) The last I heard was that the BTCs would only go away for the 'evil rich' making over $250K a year --as a matter of fairness.
3) Most likely scenario: our fearless leaders will reinstate the BTCs across the board.
Looks like more OT at TT this summer!
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03-07-2012, 11:01 AM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,139
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Quote:
Originally Posted by ziggy29
I think that's all this is. But in reality there is very little desire in Washington to revert to higher taxes for those now in the 25% brackets and below. The political question is whether making the middle class tax cut permanent -- which everyone wants -- will be held up by a demand to permanently extend *all* the tax cuts all the way up the ladder.
My guess? They agree to kick the can for two more years, yet again. Agreeing to kick the can is just about the only thing they *can* agree on.
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I don't know. It's going to be quite a fight to make the "middle class" and lower tax cuts permanent, excluding the higher earners. And making the tax cuts permanent for all earners flies in the face of the increasing deficit. If no legislation is passed then everyone's taxes go back up. Definitely a rock and a hard place and another hard place.
Kick the can with a 2 year extension made more sense in 2010 when we were still? in a horrible recession and unemployment was still almost 10%. It's a little harder to sell now that the economy is starting to improve - but maybe.
We'll see.
Audrey
__________________
Retired since summer 1999.
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03-07-2012, 11:09 AM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Quote:
Originally Posted by audreyh1
I don't know. It's going to be quite a fight to make the "middle class" and lower tax cuts permanent, excluding the higher earners. And making the tax cuts permanent for all earners flies in the face of the increasing deficit. If no legislation is passed then everyone's taxes go back up. Definitely a rock and a hard place and another hard place.
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Perhaps, but again, almost no one on either side in Washington wants to raise taxes on the lower/middle classes. The dispute, of course, is that one side wants to decouple it from the tax cuts for the wealthy, and the other side positions the tax cuts as an all-or-nothing package. So really, it comes down to this: Does the party that wants all the tax cuts made permanent willingly block the middle class tax cut extension -- effectively raising lower and middle class taxes -- unless it also gets the tax cuts on the wealthy? (Rhetorical question, obviously.) It's a political gamble, to be sure.
Quote:
Originally Posted by audreyh1
Kick the can with a 2 year extension made more sense in 2010 when we were still? in a horrible recession and unemployment was still almost 10%. It's a little harder to sell now that the economy is starting to improve - but maybe.
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Perhaps, but I still think they do it. Kicking the can is pretty much the only thing R's and D's agree on these days and it's the only compromise they seem to know how to make. And in reality, I think that's the worst thing they can do -- the economy and the financial markets don't need the continued uncertainty that comes with kicking the can and merely deferring yet another permanent decision.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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03-07-2012, 11:12 AM
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#16
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,704
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I'm not making any changes to my portfolio based on what might happen with taxes. A lot of wild speculation, however, might lead some people to overreact and that could be a buying opportunity.
__________________
In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could.”
― Rudiger Dornbusch
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03-07-2012, 11:25 AM
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#17
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,499
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Quote:
Originally Posted by MichaelB
I'm not making any changes to my portfolio based on what might happen with taxes. A lot of wild speculation, however, might lead some people to overreact and that could be a buying opportunity.
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+1
Nothing I can do about it anyway.
Quote:
Originally Posted by marko
1) If so, is anyone planning on a higher withdrawal at the end of THIS year? (see 2 &3)
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Right now I am living on dividends, which are already taxed. The only shares I am selling are TSP, which I have been gradually draining via equal monthly payments to lower my future RMD's. I already planned to stop doing that in the next year or two when I claim SS. So, no increase in withdrawal amount here, even if speculations about possible tax changes actually do happen. I suspect we'll have a better idea about what 2013 taxes will look like by December.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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03-07-2012, 12:42 PM
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#18
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Administrator
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,123
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Quote:
Originally Posted by marko
1) If so, is anyone planning on a higher withdrawal at the end of THIS year? (see 2 &3)
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I won't need to make that decision until December when we should know the new rates for 2013. Since my withdrawal is mostly dividends, the only decision will be if I have to cash in some I-Bonds, and then pay the 2012 tax rate only if I see my marginal rate going up in 2013.
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
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03-07-2012, 01:03 PM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Posts: 5,381
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Quote:
Originally Posted by audreyh1
I don't know. It's going to be quite a fight to make the "middle class" and lower tax cuts permanent, excluding the higher earners. And making the tax cuts permanent for all earners flies in the face of the increasing deficit. If no legislation is passed then everyone's taxes go back up. Definitely a rock and a hard place and another hard place.
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Even in Washington this is pretty easy stuff.
On one hand, you have a group of people who want to let part of the tax cuts expire and on the other hand you have a group that wants none to expire. The fight is going to be whether the one side is willing to threaten tax increases on 90% of the voting public for the benefit of 10%. There will be plenty of posturing around that idea, but it is a political loser and there is no way they'll go to the mat for it.
But assume they do. Massive tax increases for everybody. How long does that last when nobody actually wants that result? The easiest thing to do in D.C. by far is cut taxes. After the brinksmanship we'll probably get some reasonable tax reform . . . something else both sides say they want.
One more thing to keep in mind. Despite protestations to the contrary, nobody actually cares about the deficit. Not the public and certainly not politicians. That fact is painfully obvious when you look at the tax and spending proposals put out by any of the people who have a chance at being the next POTUS. On the stump they'll nod to the idea that deficits are an existential threat, and in the very next breath promise all kinds of unpaid-for goodies. Voter's aren't punishing the irresponsible promises. They're demanding them.
Oh, we'll keep most of our tax cuts. You can take that to the bank.
__________________
Retired early, traveling perpetually.
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03-07-2012, 01:03 PM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,237
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Quote:
Originally Posted by ziggy29
Perhaps, but again, almost no one on either side in Washington wants to raise taxes on the lower/middle classes. The dispute, of course, is that one side wants to decouple it from the tax cuts for the wealthy, and the other side positions the tax cuts as an all-or-nothing package. So really, it comes down to this: Does the party that wants all the tax cuts made permanent willingly block the middle class tax cut extension -- effectively raising lower and middle class taxes -- unless it also gets the tax cuts on the wealthy? (Rhetorical question, obviously.) It's a political gamble, to be sure.
Perhaps, but I still think they do it. Kicking the can is pretty much the only thing R's and D's agree on these days and it's the only compromise they seem to know how to make. And in reality, I think that's the worst thing they can do -- the economy and the financial markets don't need the continued uncertainty that comes with kicking the can and merely deferring yet another permanent decision.
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Agreed... one way or another the tax cuts for the middle/low will be extended... if the election goes to Obama, he has more power to get his way even if both houses of Congress goes Repub...
If a Repub gets into the White House, then the whole tax cut will more than likely be extended.... who cares about the deficit....
Either way, I am safe to assume the tax rates will remain the same and I am planning with that in mind....
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