Federal Taxes Revisited
In the last edition of Peacock Tales, we provided our readers with information regarding the Economic Growth and Tax Relief Reconciliation Act of 2001, which was set to expire on January 1, 2013. On New Year's Day, Congress passed a bill preserving the Bush-era tax cuts for the majority of Americans. Despite this bill, many Americans will see a slight tax increase, because the 2% payroll tax holiday has expired.
The bill also preserved the $5 million estate and gift tax exclusion amount (indexed for inflation), but raised the top rate on those taxes from 35% to 40%. In addition, the bill makes portability - the ability for surviving spouses to use the unused exclusion amount of a pre-deceased spouse - permanent.
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