Richard A. Lindsey, CPA

Lindsey & Waldo, LLC – Certified Public Accountants

  • Nov 26
  • Nov 9

    Federal income tax rates are expected to rise. Many are fearful they will skyrocket. Unless Congress acts during the lame-duck session after the election, the so-called “Bush-era” tax cuts will expire and Federal income tax rates will rise for all individuals, except those in the 15% bracket. Effective January 1, 2013, payroll tax withholding will escalate 2%. Also in 2013, there will be an additional 0.9% Medicare tax on wages and self employment income above $200,000 ($250,000 if married, filing joint) and, for the first time ever, a new 3.8% Medicare surtax on investment income for certain taxpayers.

    Dividends could see rate spikes as much as 28.4%, from the current 15% rate to 43.4%, if the top 39.6% rate and the 3.8% Medicare surtax apply.

    The following table compares the 2012 regular tax rates to the 2013 tax rates if the “Bush-era” tax rates are allowed to expire as scheduled. CAUTION: This table does not take into account the phase-out of deductions including the phase-out of personal exemptions and itemized deductions. In addition, this table does not include AMT rates.


    (1) Includes 3.8% Medicare surtax on net investment income

    (2) Includes 0.9% Medicare surtax

    (3) Does not reflect phase-outs for itemized deductions or exemptions


    CAUTION! Proper calculations of an individual’s income tax liability cannot be made unless “with and without” calculations are made using tax planning techniques which consider the regular tax, the new Medicare surtaxes, the AMT, and the state income tax effects of a planning strategy.

  • Nov 2

    If you owe money to the IRS and you are receiving Social Security benefits due to Federal Old-Age and Survivors Trust Fund or Disability Insurance Benefits, the IRS can take 15% of your Social Security payments to satisfy your tax debt. Prior to 1996, there was a $750/month “off limits” amount that had to be left for the Social Security recipient. That changed with the introduction of the Federal Payment Levy Program, which allowed for 15% of the total monthly payment to be collected—regardless of the amount left after the Social Security levy…NO amount is off limits!