New Tax Changes for January 1, 2011

New Tax Changes for January 1, 2011

In just 4 months, on January 1, 2011, the largest tax hikes in the  history of America will take effect.

They  will hit families and small businesses in three great  waves.

On January  1, 2011, here’s what happens… (read it to the end, so you see  all three waves)…

First Wave:


Expiration  of 2001 and 2003 Tax Relief

In  2001 and 2003, the GOP Congress enacted several tax cuts  for investors,  small business owners, and families.   These  will all expire on January 1, 2011.


Personal  income tax rates will rise.

The  top income  tax rate will rise from 35 to 39.6 percent (this is also the  rate at  which two-thirds of small business profits are taxed).

The lowest  rate will rise from 10 to 15 percent.

All  the rates in between  will also rise.

Itemized  deductions and personal exemptions will  again phase out, which has the same mathematical effect as  higher marginal  tax rates.


The  full list of marginal rate hikes is  below:

• The  10% bracket rises to an expanded 15%
• The  25% bracket rises to 28%
• The  28% bracket rises to 31%
• The  33% bracket rises to 36%
• The  35% bracket rises to 39.6%

Higher  taxes on marriage and family.

The “marriage  penalty” (narrower tax brackets for married couples)  will return from the first dollar of income.

The  child tax credit  will be cut in half from $1000 to $500 per child.

The standard  deduction will no longer be doubled for married couples  relative to  the single level.

The  dependent care and adoption tax credits will  be cut.

The return of the Death  Tax.

This  year only,  there is no death tax.  (It’s a  quirk!) For  those dying on or after January 1,  2011, there is a 55 percent top death tax rate on  estates over $1 million.  A person leaving behind two homes,  a business, a  retirement account, could easily pass along a death tax bill to their loved ones.   Think of the farmers who don’t make much money, but their  land, which they purchased years ago with after-tax dollars, is  now worth a lot of money.  Their children will have to sell  the farm, which may be their livelihood, just to pay the estate  tax if they don’t have the cash sitting around to pay the tax.   Think about your own family’s assets.  Maybe your  family owns real estate, or a business that doesn’t make much  money, but the building and equipment are worth $1 million.   Upon their death, you can inherit the $1 million business  tax free, but if they own a home, stock, cash worth $500K on top  of the $1 million business, then you will owe the government  $275,000 cash!  That’s 55% of the value of the assets over $1  million!  Do you have that kind of cash sitting around  waiting to pay the estate tax?

Higher  tax rates on savers and investors.

The  capital gains tax will rise from 15 percent this year to 20  percent in 2011.

The  dividends tax will rise from 15 percent this year to  39.6 percent  in 2011.

These  rates will rise another 3.8 percent in  2013.


Second Wave:

Obamacare

There  are over twenty new or higher taxes in Obamacare. Several will  first go into effect on January  1, 2011.  They include:

The  “Medicine Cabinet Tax”

Thanks  to Obamacare, Americans will no longer be able to use  health savings  account (HSA), flexible spending account (FSA), or  health reimbursement  (HRA) pre-tax dollars to purchase  non-prescription, over-the-counter  medicines (except insulin).

The  “Special Needs Kids Tax”

This  provision of Obamacare imposes a cap on flexible spending accounts  (FSAs) of  $2500 (currently, there is no federal government limit).  There is  one group of FSA owners for whom this new cap will be  particularly cruel  and onerous: parents of special needs children.

There  are thousands  of families with special needs children in the United States  , and  many of them use FSAs to pay for special needs  education.

Tuition  rates at one leading school that teaches special needs  children in   Washington , D.C. ( National Child Research Center ) can easily  exceed $14,000 per year.

Under  tax rules, FSA dollars can not be used to pay for this type of  special needs  education.

The  HSA (Health Savings Account) Withdrawal Tax  Hike.

This  provision of Obamacare increases the additional tax on non-medical  early withdrawals from  an HSA from 10 to 20 percent, disadvantaging them relative to  IRAs and  other tax-advantaged accounts, which remain at 10  percent.

Third Wave:

The  Alternative Minimum Tax (AMT)  and Employer Tax Hikes

When  Americans prepare to file their tax returns in January of  2011, they’ll  be in for a nasty surprise-the AMT won’t be held  harmless, and many tax relief provisions will have  expired.

The  major items include:

The  AMT will ensnare over 28 million families, up from 4 million last  year.

According  to the Tax Policy Center , Congress’ failure to index  the AMT will lead to an  explosion of AMT taxpaying families-rising from 4 million  last year  to 28.5 million.  These families will have to calculate  their tax  burdens twice, and pay taxes at the higher level.  The AMT  was created  in 1969 to ensnare a handful of taxpayers.

Small  business expensing will be slashed and 50% expensing will  disappear.

Small  businesses can normally expense (rather than slowly-deduct,  or “depreciate”)  equipment purchases up to $250,000.

This will  be cut all the way down to $25,000.  Larger businesses  can currently expense  half of their purchases of equipment.

In January of  2011, all  of it will have to be “depreciated.”

Taxes  will be raised on all types of businesses.

There  are literally scores of tax hikes on business that will  take place.   The biggest is the loss of the “research  and experimentation  tax credit,” but there are  many, many others. Combining high marginal tax rates  with the  loss of this tax relief will cost jobs.

Tax  Benefits for Education and Teaching  Reduced.

The  deduction for tuition and fees will not be available.

Tax  credits for  education will be limited.

Teachers will no longer  be able to deduct  classroom expenses.

Coverdell Education  Savings Accounts will  be cut.

Employer-provided  educational assistance is curtailed.

The student loan  interest deduction will be  disallowed for  hundreds of thousands of families.

Charitable  Contributions from IRAs no longer allowed.

Under  current law, a retired person with an IRA can contribute up  to $100,000  per year directly to a charity from their IRA.

This contribution  also counts toward an annual “required  minimum distribution.”   This ability will no longer be  there.

PDF   Version  Read more:  <http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171>;  http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171#%23ixzz0sY8waPq1

And worse  yet?

Now, your insurance  will be INCOME on your W2’s!

One  of the surprises we’ll  find come next year, is what follows – – a  little “surprise”  that 99% of us had no idea was included in  the “new  and improved” healthcare legislation . . .  the members of congress who backed the administration on this point will  be astonished!

Starting  in 2011, (next year folks), your W-2 tax form sent  by your  employer will be increased to show the value of  whatever health  insurance you are given by the company. It does  not matter  if that’s a private concern or governmental body  of some  sort.

If you’re retired?   So what… your gross will  go up by the amount of insurance you get.

You  will be required to pay taxes on a large sum of money that  you have  never seen.  Take your tax form you just  finished and  see what $15,000 or $20,000 additional gross does to  your tax  debt.  That’s what you’ll pay next year.

For many,  it also puts you into a new higher bracket so it’s  even worse.

This  is how the government is going to buy insurance for the 15% that  don’t have  insurance and it’s only part of the tax  increases.

Not  believing this???  Here is a research of  the summaries…..

On  page 25 of 29: TITLE IX REVENUE PROVISIONS-  SUBTITLE A: REVENUE OFFSET PROVISIONS-(sec. 9001,  as modified by sec.  10901) Sec.9002  “requires  employers to  include in the W-2 form of each employee the aggregate cost  of applicable  employer sponsored group health coverage that  is excludable  from the employees gross income.”

– Joan  Pryde is the senior tax editor for the Kiplinger  letters.
– Go  to Kiplingers and read about 13 tax changes  that could  affect you.  Number 3 is what is  above.

Cap & Tax Your Ass Off – Don’t Get Raped – Ron Paul & John Tate Speak

Fellow Patriot,
Radical environmentalists and Big Government Politicians are joining forces to jam through the radical Cap and Tax scheme, with a vote possibly as soon as September.

Campaign for Liberty needs your help if we are to defeat this tax-increasing, freedom-stealing legislation.

Campaign for Liberty President John Tate and I have prepared an urgent audio update on how C4L plans to defeat this Big Government power grab.

Please take a moment to read John’s email below and then listen to this crucial message.

In Liberty,

Congressman Ron Paul

===============================================

Congressman Ron Paul and I have prepared an urgent message for you regarding the Cap and Tax Scheme.

You see, Big Government politicians know that freedom-loving Americans are furious.

They realize they are facing a bloodbath at the polls in November, so they are preparing a desperate push to jam Cap and Tax through the Senate, with a vote possibly as soon as September.

Please take a few minutes to listen to this urgent message. Despite what you may have heard in the press, Cap and tax is far from dead, and we must keep the heat on the Senate to make sure we win this fight.

SIGN THIS TODAY! SPREAD TO FRIENDS AND FAMILY! VERY IMPORTANT!

(Please view Global Warming Myth section to view why this is a “Radical Law”

Check it out… Right now – Simranjeet)

For Liberty,

John Tate

President

Copenhagen Climate Summit: 1,200 Limos, 140 Private Planes

Copenhagen Climate Summit: 1,200 Limos, 140 Private Planes

December 7, 2009
Telegraph

By Andrew Gilligan

On a normal day, Majken Friss Jorgensen, managing director of Copenhagen’s biggest limousine company, says her firm has twelve vehicles on the road. During the “summit to save the world”, which opens here tomorrow, she will have 200.

“We thought they were not going to have many cars, due to it being a climate convention,” she says. “But it seems that somebody last week looked at the weather report.”

Ms Jorgensen reckons that between her and her rivals the total number of limos in Copenhagen next week has already broken the 1,200 barrier. The French alone rang up on Thursday and ordered another 42. “We haven’t got enough limos in the country to fulfil the demand,” she says. “We’re having to drive them in hundreds of miles from Germany and Sweden.”

And the total number of electric cars or hybrids among that number? “Five,” says Ms Jorgensen. “The government has some alternative fuel cars but the rest will be petrol or diesel. We don’t have any hybrids in Denmark, unfortunately, due to the extreme taxes on those cars. It makes no sense at all, but it’s very Danish.”

The airport says it is expecting up to 140 extra private jets during the peak period alone, so far over its capacity that the planes will have to fly off to regional airports – or to Sweden – to park, returning to Copenhagen to pick up their VIP passengers.

As well 15,000 delegates and officials, 5,000 journalists and 98 world leaders, the Danish capital will be blessed by the presence of Leonardo DiCaprio, Daryl Hannah, Helena Christensen, Archbishop Desmond Tutu and Prince Charles. A Republican US senator, Jim Inhofe, is jetting in at the head of an anti-climate-change “Truth Squad.” The top hotels – all fully booked at £650 a night – are readying their Climate Convention menus of (no doubt sustainable) scallops, foie gras and sculpted caviar wedges.

At the takeaway pizza end of the spectrum, Copenhagen’s clean pavements are starting to fill with slightly less well-scrubbed protesters from all over Europe. In the city’s famous anarchist commune of Christiania this morning, among the hash dealers and heavily-graffitied walls, they started their two-week “Climate Bottom Meeting,” complete with a “storytelling yurt” and a “funeral of the day” for various corrupt, “heatist” concepts such as “economic growth”.

The Danish government is cunningly spending a million kroner (£120,000) to give the protesters KlimaForum, a “parallel conference” in the magnificent DGI-byen sports centre. The hope, officials admit, is that they will work off their youthful energies on the climbing wall, state-of-the-art swimming pools and bowling alley, Just in case, however, Denmark has taken delivery of its first-ever water-cannon – one of the newspapers is running a competition to suggest names for it – plus sweeping new police powers. The authorities have been proudly showing us their new temporary prison, 360 cages in a disused brewery, housing 4,000 detainees.

And this being Scandinavia, even the prostitutes are doing their bit for the planet. Outraged by a council postcard urging delegates to “be sustainable, don’t buy sex,” the local sex workers’ union – they have unions here – has announced that all its 1,400 members will give free intercourse to anyone with a climate conference delegate’s pass. The term “carbon dating” just took on an entirely new meaning.

At least the sex will be C02-neutral. According to the organisers, the eleven-day conference, including the participants’ travel, will create a total of 41,000 tonnes of “carbon dioxide equivalent”, equal to the amount produced over the same period by a city the size of Middlesbrough.

The temptation, then, is to dismiss the whole thing as a ridiculous circus. Many of the participants do not really need to be here. And far from “saving the world,” the world’s leaders have already agreed that this conference will not produce any kind of binding deal, merely an interim statement of intent.

Instead of swift and modest reductions in carbon – say, two per cent a year, starting next year – for which they could possibly be held accountable, the politicians will bandy around grandiose targets of 80-per-cent-plus by 2050, by which time few of the leaders at Copenhagen will even be alive, let alone still in office.

Even if they had agreed anything binding, past experience suggests that the participants would not, in fact, feel bound by it. Most countries – Britain excepted – are on course to break the modest pledges they made at the last major climate summit, in Kyoto.

And as the delegates meet, they do so under a shadow. For the first time, not just the methods but the entire purpose of the climate change agenda is being questioned. Leaked emails showing key scientists conspiring to fix data that undermined their case have boosted the sceptic lobby. Australia has voted down climate change laws. Last week’s unusually strident attack by the Energy Secretary, Ed Miliband, on climate change “saboteurs” reflected real fear in government that momentum is slipping away from the cause.

In Copenhagen there was a humbler note among some delegates. “If we fail, one reason could be our overconfidence,” said Simron Jit Singh, of the Institute of Social Ecology. “Because we are here, talking in a group of people who probably agree with each other, we can be blinded to the challenges of the other side. We feel that we are the good guys, the selfless saviours, and they are the bad guys.”