Major Economic Changes that Likely to occur In 2013
Economists believe that the year 2013 is set to usher in some major changes. Benefit rule and federal taxes are all set for a complete overhaul. Given that this year is racing to a close, it’s time for everyone to have a plan ready to gear up for the impending changes.
Firstly, the tax policies introduced by former president G. Bush will be replaced by a new set of tax cut rates which will affect one and all. The new lowest tax cut rate would be 15 percent instead of the existing 10 percent and the top tax bracket would be 39.6 percent against the present rate of 35 percent. All other tax rates in between will be going up by 3 percent. Along with this, the state is expected to roll out spending cuts to the tune of $100 billion. Social Security payroll taxes are set to expire next year along with jobless benefits.
Those whose annual salary is above $200,000 will have to shell out more for their Medicare payroll tax. Amount above this figure will invite a tax of 2.35 percent instead of the existing 1.45 percent. Another addition to their expenditure would be a 3.8 percent tax on their net investment income. The new rules would ensure that tax payers will be able to deduct reimburse medical expense that is more than 10 percent of their taxable incomes.
In keeping with the changes, estate and gift exemption is expected to come down to $1 million next year. The tax imposed above the exemption ceilings will raise from 35 percent to 55 percent.
The annual cost of living adjustment or COLA went up by 3.6 percent in 2012. Because of the prevailing general inflation, the COLA figure next year is expected to be less generous. The proposed health reform may exclude many dependents from the ambit of medical coverage. Changes have been triggered in Medicare Advantage and prescription drug plans. So, you need to think twice before continuing with the current plan, even though you have no reasons to complain about it.