Friday, March 1, 2013

Q.  I just received the 1099-ES vouchers from my preparer, and I noticed the total amounts were almost identical to what I owed this year. Most of my income comes from qualified dividends and capital gains. With the rates increasing from 15% to 20%, shouldn't my estimated tax payments be higher?

A.  Although capital gain rates increased as you stated, this will affect taxpayers with taxable incomes in the 39.6% bracket, or those with taxable incomes starting at $400,000 and up, depending on your filing status. If you don't fall into that category, you will continue to enjoy low capital gain rates. If you do fall within the 39.6% bracket, you should call your preparer and discuss your estimated tax payments. It is possible the software package used hasn't factored in this rate change.

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