Feeling confused? You’re not the only one. Between the income and payroll tax increases in Obamacare and the fiscal cliff parachute, it is hard to tell what is happening - even if you have a program identifying the players.
Do I get hit at $200,000, $250,000, $400,000? Yes, all of the above. It depends on the type of income – earned or unearned – and whether your dividends and capital gains are qualified or not.
How high can your marginal bracket get? In Massachusetts, try over 46%. And, that does not consider the new income tax trial balloon that the Governor tossed out in his State of the State report. Outside of Massachusetts, the highest rate could be more or less. Depends on your state income tax.
At best, consistent with local and federal tax policy, it is confusing. We can hardly wait for the regulations, announcements and rulings that will explain all of this.
For some examples and our take on what is happening, please ask for our white paper on these new taxes. Contact Barry Koslow at bkoslow@mkaplanners.com.
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