Forbes recently detailed some of the key proposals from President Obama in its article titled “President's New Tax Proposal Would Hit Wealthy, Benefit Middle Class.”
The highlights include these provisions:
Eliminating stepped up basis. The President says that this is “the single largest capital gains tax loophole.” He proposes to eliminate stepped up basis at death, in which heirs are allowed to use the date of death value of capital assets instead of the decedent’s actual basis for capital gains calculations.
Raising capital gains and dividend rates. In order to spur investment activity, the capital gains and dividends rates have been decreased over the past 30 years. The President’s plan would "up" those rates to 28% for high-income taxpayers.
A new tax credit for double-income families. Obama proposes providing a tax credit of up to $500 for families with two working spouses (equal to 5% of the first $10,000 of earnings for the lower-earning spouse in a married couple). The maximum credit would be available to families with incomes up to $120,000, with a partial credit available up to $210,000.
Upping child care tax incentives. President Obama proposes to increase the child care tax credit, or the dependent care tax credit, to $3,000, but only for middle class families with children under five.
New education tax benefits. Combining some of the existing education tax benefits is part of Obama’s strategy, with a move that would conceivably permit more students up to $2,500 in tax breaks each year over five years. The Lifetime Learning Credit and the tuition and fees deduction would be cut and replaced by an expanded American Opportunity Credit (AOC). The refundable part of the AOC would also be increased.
Please call me anytime (305-443-3104) for more information about how, as an exceptionally experienced Florida Bar Board Certified Estate Planning Attorney, and as a Florida Bar Board Certified Elder Law Attorney, I can help you evaluate the latest changes in law and taxes as relates to your estate. Did I mention that I am also a Florida Certified Public Accountant (CPA)? Of course, if you would like more information about General Estate Planning in South Florida, I have a very informative website!
Reference: Forbes (January 17, 2015) “President's New Tax Proposal Would Hit Wealthy, Benefit Middle Class”
Image Credit: Barack Obama 48 by David Wagner. Public domain.