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Important Tax Facts to Consider for the New Year

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Tax changes for higher-income earners

Starting with 2013 tax year a new 39.6% federal income tax rate applies if your taxable income exceeds $400,000 (single) or $450,000 (married filing jointly). If you cross that threshold, a new 20% maximum tax rate applies on long-term capital gains and qualifying dividends. If your adjusted gross income is more than $250,000 (single) or $300,000 (married filing jointly), your personal and dependency exemptions may be reduced or eliminated, and your itemized deductions may be limited.

Higher Medicare taxes apply

If your wages exceed $200,000 (single) or $250,000 (married filing jointly), the hospital insurance (HI) portion of the payroll tax is increased by 0.9%. Also, a 3.8% Medicare contribution tax generally applies to some or all of your net investment income if your modified adjusted gross 
income exceeds those 
dollar thresholds.

Retirement plan contributions

You have until April 15, 2014 to make Traditional IRA, Roth IRA, or SEP IRA contributions for the 2013 tax year. (However, if you file an extension, you have until October 15, 2014 to fund a SEP IRA). Make sure that you’re taking full advantage of tax-advantaged retirement savings vehicles.

 

 

Tax information presented is not to be considered as tax advice and cannot be used for the purpose of avoiding tax penalties. Neither Canandaigua National Trust Company of Florida nor its affiliated Companies provide tax, legal, or accounting advice. Please consult your personal tax advisor, attorney, or accountant for advice on these matters. This material is provided for general information purposes only and is not a recommendation or solicitation to buy or sell any particular security, product or service. Past performance is not indicative of future investment results. Any investment involves potential risk, including potential loss of capital. Before making any investment decision, please consult your legal, tax and financial advisors. Non-deposit investment products are not bank deposits and are not insured or guaranteed by Canandaigua National Trust Company of Florida, or any federal or state government or agency and are subject to investment risks, including possible loss of principal amount invested.

 

Posted by Sage Keber at 01/22/2014 09:30:37 AM 

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