Accountant Tax Preparation

Phoenix Tax Preparation | Tax Increases

President Barack Obama is set to promote his new plan for wealth redistribution. He will unveil and discuss his plan during his State of the Union address tonight. The plan involves limiting the profits wealthy Americans can make on investments and making it harder for the wealthy to pass their assets to their heirs. His plan will face a tough opposition from the Republican controlled Congress. The President’s plan for capital gains calculation at death would exempt the first $200,000 in capital gains per couple plus $500,000 for a home, along with personal property except for certain valuable art and collectibles. The rest of the property that is inherited would be treated as though they were sold at the date of death. Per a White House spokesperson, the top 1 percent of households would bear 99 percent of the burden for this tax increase. This tax increase is targeted at founders of successful businesses and others who inherited their business decades ago.

He will also discuss new tax breaks tonight. He is proposing a $500 tax credit for married couples who both work. He is also trying to triple the current child care credit for a maximum credit of $3,000 for children under 5. The government would effectively pay half of the first $6,0000 in child care costs. He is proposing eliminating flexible spending accounts for child care. Because these FSA accounts are deductions they are more beneficial to higher earning families than lower earning ones. President Obama is also wanting to consolidate several education credits into a single tax credit worth up to $2,500. Many of  these ideas are unlikely to advance very far in the Republican controlled Congress.

If you have any questions or would like to discuss this further, feel free to contact us Dusseau & Makris, PC, your Phoenix tax preparation firm.