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New President New Tax Plan
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The new President of the United States is Barack Obama. What does that mean for you and your business? The chart below outlines Obama's plan with regard to important tax policies. Please feel free to contact Kelley LaRoche at 423-702-8149 with any questions you may have related to the tax issues being presented.
| Individual Tax Cuts | Maintain the current 10, 15, 25, and 28 percent rates from the 2001-03 tax cuts, but allow the top two rates to expire (the 33 percent rate would rise to 36 percent; the 35 percent would rise to 39.6 percent) |
| New Tax Cuts | "Making Work Pay Credit" - fully-refundable 6.2 percent of earnings up to a maximum of $8,100 per qualified worker |
| "American Opportunity Tax Credit" - formally the Hope Credit, would make the first $4,000 of college expenses fully-refundable | |
| Expansion of the Earned Income Tax Credit, increasing the phase-in rate to 45 percent for families with three or more children and increasing the phase-out threshold for married filers to $5,000 | |
| Eliminate income tax for seniors making less than $50,000 per year | |
| "Universal Morgage Credit" - fully-refundable 10 percent of mortgage interest up to $800 for nonitemizers | |
| Make Child and Dependent Care Tax Credit fully-refundable equal to 50 percent of child care expenses less than $6,000 | |
| Make saver's credit refundable and change to a 50 percent match of the first $1,000 of contributions | |
| Capital Gains | Increase maximum capital gains tax rate to 20 percent for those earning more than $200,000 ($250,000 for married couples) |
| Eliminate capital gains taxes on start-up and small businesses | |
| Social Security Taxes | Increase the amount collected on wage earners making more than $250,000. Currently, the social security tax is levied on only the first $102,000 of each worker's earnings. Under Obama's proposed plan, the tax would be levied again, albeit at a lower rate (4 percent versus 12.4 percent), starting at $250,000 with no cap (no change from $102,000 to $250,000). The change would not be effective until 2018. |
| Alternative Minimum Tax | Extend AMT patch |
Sources: SmartPros.com; TaxFoundation.org |