Obama: Change In the Face of Taxes

The new budget breakdown looks like it’s going to impact your taxes a few new ways. Well, let’s use the term “new” very loosely.  Moving on, the key proposals from Obama’s plan are as follows:

Here is the breakdown for high income households, that’s individuals who are grossing $200,000+ and families that are grossing $250,000+. These people they get to watch the tax cuts from the Bush years expire. Poof. Gone. The number crunchers in Washington estimate this will bring in close to $700 billion in ten years.  The phase-out would come back too; making it harder for these households to file certain personal exemptions. The provisions would also limit the itemizing of many deductions for these high grossing households. The estates tax would stay, despite the rumors, and there would be a nice chunk of change raised by the increasing of taxes on investment fund manager profits. Also, it is expected that the capital gains tax on small business stock would be done away with, making investing in these smaller companies that have $50 million or less in assets more lucrative.

Now let’s get to how Obama is going to affect most of the nations filing. For the middle class, or rather middle income to low income households, the outlook is pretty…well, pretty. We will see the tax cuts of the last administration stay. So the rates, dividends, and capital gains are staying where they are at. The cost to the treasury is looking somewhere in the area of $2 trillion over the next 10 years. Lower grossing households are also going to see amendments to the Alternative Minimum Tax (AMT), thereby protecting them even more from paying the “wealth” tax. About four tax credits are hanging around too. The American Opportunity Tax Credit, the child-care tax credit, the low-income tax credit and the Make Work Pay credit will all be extended or expanded. People these provisions for the middle to lower class alone are easily pushing into the trillions. Tax season is here. Take advantage of the tax credits and stay informed with TaxFiling.net.

A post regarding healthcare reform and its effect on our taxes can be found here.