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Fiscal Cliff Legislation: What Does It Mean for Your Taxes?
Posted in Tax and Finance

The American Taxpayer Relief Act of 2012, signed into law by President Barack Obama on Jan. 2, 2013, has made several changes to federal income tax rates on individuals. Read the excerpt below from “The Fiscal Cliff In Depth” to see how the legislation could affect you and your taxes:

Individuals earning income over $400,000 ($450,000 for married couples filing jointly) will see their top income tax rate increased from 35 percent to 39.6 percent. The rates on long-term capital gains and qualified dividends for these higher-income taxpayers were also increased from 15 percent to 20 percent. These rate increases are small and will not affect the vast majority of taxpayers, but those who are affected by these rate increases should be aware that they may also be subject to the 3.8 percent Medicare surtax on net investment income that was part of the Patient Protection and Affordable Care Act in 2010.



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