New taxes you will pay....MUST READ

There are just a few things I will blog about in term of politics.  But everyone really needs to know what we are getting our selves into.  Children's tax credit...cut in half.....please read and be educated.  I got this as an email forward...

While many of you may have seen the new tax changes that take effect January 1, 2011, I am forwarding this on to those who may have missed it.   This is further incentive for all of us to make certain we get out the vote in November, so that we can hopefully get this repealed.

New Tax Changes for January 1, 2011

In  just six 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 left-leaning 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 cancurrently 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  dupes,  er, dopes, who backed this administration 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 the15% 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