House Oversight — Estate records
HOUSE_OVERSIGHT_022361
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Blanche Lark Christerson Managing Director, Senior Wealth Planning Strategist Tax Topics 2013-05 04/29/13 Fiscal Year 2014 Budget issued On April 10 th , President Obama issued his Fiscal Year 2014 budget. Shortly thereafter, the Treasury Department issued its “Green Book,” which explains the tax provisions in the budget. Although most of these provisions are familiar and have appeared in previous budgets, a few were new. Here is a selected overview of some of these provisions, most of which would apply (assuming Congress enacts them) as of 2014: • Limit the value of certain tax benefits. As in previous budgets, the current budget proposes to limit the value of various tax benefits so that they only reduce or shelter income that would be taxed at 28% or less. In other words, taxpayers with income that would be taxed at the 33%, 35% or 39.6% rate would see tax benefits curtailed, including ALL itemized deductions (these include deductions for mortgage interest, charitable contributions and state and local taxes), tax-exempt municipal bond interest, employer and employee contributions to employer-sponsored health insurance, employee contributions to retirement plans such as 401(k)s, contributions to health savings accounts and Archer medical savings accounts, interest on education loans and certain higher education expenses. Because an affected taxpayer’s pre-tax contribution to her retirement account would be taxed, the account’s “basis” would be increased accordingly. Comments. This proposal is not new, but the basis adjustment for retirement accounts is an equitable provision that was previously missing. Also, because the proposal would apply to income that is taxed at 33%, 35% or 39.6%, it would increase taxes on some of those President Obama has previously pledged to insulate from higher taxes – namely, individuals with income under $200,000 or married couples filing jointly with income under $250,000. That is, in 2013, the 33% tax rate applies to taxable income […]