Yes, it’s true. In 2013, the capital gains tax will increase. The law has been passed and the course has been set. So now that we know this is the case. Here’s what to expect.
1. At the end of 2013, the tax on capital gains is scheduled to rise and will become much more complex.
2. For people in the lower tax brackets (adjusted gross income $70,700 for married couples and $35,350 for singles), the tax is currently at 0% and will be rising to 10%.
3. For the middle tax bracket, there will be a rise from 15% to 20% (including an additional 2.3% Medicare surtax that is part of Obamacare).
4. Currently the tax on capital gains for people in the lower federal tax brackets is 0%. This includes those who are married with an adjusted gross income (AGI) below $70,700 and single taxpayers with an AGI below $35,350.
With these changes, one might be anxious to determine the best way to avoid this increase in taxes. Our advice– sit tight. Seek out the help of a qualified advisor who can walk you through your individual situation to determine what outcome is best for you based on the current order of your finances.