Money Monday: Your 'Fiscal Cliff' swag bag - Fox 2 News Headlines

Money Monday: Your 'Fiscal Cliff' swag bag

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TROY, Mich. (WJBK) -- We have managed to avert some of the ‘Fiscal Cliff.' It's time to celebrate!

Here's a Fiscal Cliff Party SWAG Bag you don't want to be left without, says Leon LaBrecque, JD, CPA, CFP, CFA, Chief Strategist and founder of LJPR, a firm managing over $470 million* in assets.

LaBrecque outlines some of the major items in the Fiscal Cliff SWAG Bag:

The top tax rate will permanently rise to 39.6% for families with income above $450,000 and individuals above $400,000, up from the current top rate of 35%

The tax on capital gains and dividends will be permanently set at 20% for those with income above the $450,000/$400,000 threshold. It will remain at 15% for everyone else.

The estate tax will be set at 40% up from the current level of 35% for those with estates over $5million ($10 million for couples), and it will be indexed to infla­tion.

The 2009 expansion of tax breaks for low-income Americans: the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity

Tax Credit will be extended for five years.

Includes a permanent patch fix for the alternative minimum tax (AMT)

The payroll tax holiday will be allowed to expire.

Two limits on tax exemptions and deductions for higher-income Americans will be re-imposed: Personal Exemption Phase out (PEP) will be set at $250,000 and the itemized deduction limitation (Pease) kicks in at $300,000.

The full package of temporary business tax cuts will be extended for another year.

Provisions for the doc fix, avoids a cut in payments to doctors treating patients on Medicare.

Federal unemployment insurance will be extended for another year, benefiting those unemployed for longer than 26 weeks.

A nine-month farm bill fix will be attached to the deal.

The pay freeze on members of Congress, which Obama had lifted earlier this year, will be re-imposed.

The sequestration cuts will be delayed for two months. Half of the delay will be offset by discretionary cuts, split between defense and non-defense spending.

The new tax law extends the ability to make Qualified Charitable Deductions (QCDs) of RMDs directly (or indirectly) to charity.


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