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It’s inescapable. Turn on the news and you’ll hear that our country is on the precipice of a “fiscal cliff”… and Congress’ actions – or lack thereof – will have an immediate and tremendous impact on all of us.
At Dean Mead, we’ve been helping our clients prepare for this eventuality for a while now. In fact, Steve Looney who is the chair of the firm’s Tax department published an article in the November 2012 edition of Orlando Medical News on this very topic. Steve calls it the “perfect storm”.
Here is a link to the article that appears in Orlando Medical News: http://www.orlandomedicalnews.com/the-perfect-storm-tax-changes-in-2013–cms-1545.
The perfect storm includes:
- Expiration of the two-year extension of the so-called “Bush tax cuts”, previously extended by the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the “2010 Act”).
- Expiration of the 2% Social Security payroll tax cut holiday enacted by the 2010 Act and extended by the Middle Class Tax Relief and Job Creation Act of 2012 (the “2012 Act”).
- Imposition of the new 3.8% Medicare tax on net investment income enacted by the Affordable Care Act.
- Reversion of the Alternative Minimum Tax thresholds to their 2000 tax levels.
- Expiration of measures delaying the Medicare Sustainable Growth Rate from going into effect (the “so-called doc fix”).
As we all watch developments in Congress over the next month, make sure to contact your attorney and/or tax advisor to ensure you’re positioned to weather the storm.