As we discussed last month, the much-talked-about fiscal cliff made included some changes to capital gains tax rates. Capital gains tax for households earning more than $450,000 (or individuals making more than $400,000) will also jumped from 15 percent to 20 percent. This combines with the health-care reform taxes, bringing the top federal tax on long-term capital gains to 23.8 percent.
As Alameda County residents celebrated the end of one year and the beginning of a new one, members of Congress were busy reaching an agreement that prevented the country from going over the so-called fiscal cliff. While most people were just happy to learn that a deal had been reached on New Year's Day, the question soon became: What does the deal mean to me?
It is impossible to turn on the cable news or the radio in San Francisco, or go online without reading, seeing or hearing about the fiscal cliff. There are just two weeks planned for Congress to be in session and the future is still murky.
While in the midst of a presidential campaign season there is a great deal of talk about taxes. In California, we are facing two new tax-related propositions -- Proposition 30 and Proposition 38. Amid the discussions, an interesting analysis of IRS data has taken a look at millionaires and whether or not they are voting with their feet or their pocketbooks or both.
Our readers in the Bay Area are aware that there are many ways in which people can minimize current tax liabilities. There are also ways in which you can limit future tax liabilities. Occasionally there are ways in which you can do both.
California is in competition with other states. We want the smartest children to come to our colleges. We would like people to buy our oranges rather than Florida's. And we are rightfully proud of Silicon Valley's reputation, Hollywood's entertainment value and our beautiful national parks.
If you've ever tried to get someone to do something they don't want to do, you may agree with the concept that people do things for their own reasons, and not for yours. We may never truly know the reasons that led a Facebook executive to renounce his U.S. citizenship and leave our sunny California skies. However, we do know the result of that decision.
Many of us in California have just finished sending in our personal income tax returns for 2011, but it isn't too early to plan ahead for the 2012 return according to knowledgeable sources.