IN THE NEW YEAR, managing tax liabilities will require extra planning, to prepare for the unexpected. U.S. tax laws have been subject to frequent incremental changes, with an uncertain future. Increases in tax rates effective Jan. 1, 2013, continue in 2014. Although the maximum rates for regular corporations have held firm at 35% on all income, those for individuals are now 43.4% for ordinary income and 23.8% for long-term capital gains and qualifying dividends. The higher individual tax rates also apply to income from flow-through entities, such as "S" corporations and Limited Liability Companies (LLC's) that elect to be taxed as partnerships. These rates reflect the U.S. Affordable Care Act's new 3.8% tax on unearned investment income of joint filers making over $250,000. While that Act's new tax is already in place, the mandates that employers provide compliant medical insurance coverage have been postponed until 2015.
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