Welcome!

.NET Authors: ChandraShekar Dattatreya, Trevor Parsons, Peter Silva, Yeshim Deniz, Pat Romanski

News Feed Item

CCH Outlines Options as Congress, Taxpayers Face Fiscal Cliff

CCH Offers Scenario for What Different Proposals Would Mean for a Middle-income Married Couple

RIVERWOODS, Ill., Dec. 26, 2012 /PRNewswire/ -- Congress is scheduled to return tomorrow to complete work for the year, which is hoped to include a deal to avert the December 31 "fiscal cliff" deadline, but it will need to work quickly to do so – or come to some interim agreement, according to CCH, a Wolters Kluwer business and leading global provider of tax, accounting and audit information, software and services (CCHGroup.com).

"While a deal looked close on several occasions during negotiations, it's been elusive so far," said George Jones, JD, CCH Senior Federal Tax Analyst. "Whether a resolution can be reached before Congress recesses for the year grows dimmer as the days progress."

The fiscal cliff, shorthand for January 1, 2013, when the terms of the Budget Control Act of 2011 are scheduled to go into effect, includes a series of across-the-board spending cuts and tax increases.

According to CCH, three scenarios that could transpire over the next few days include:

  • A full resolution is reached. The Presidential and Senate Democratic proposal and the Republican plan still remain miles apart. Most attention has focused on the divide between the tax increases in the Democratic proposal on incomes of more than $200,000 for single filers and $250,000 for joint filers; and the spending cuts in the Republican proposal, particularly to entitlement programs.

"Last week it seemed President Obama and House Speaker Boehner were circling in on a middle ground, but that fell apart and it's not clear they will be able to return to those positions to resume negotiations this week," said Jones.

The president had mentioned being open to a $400,000 threshold on income tax rates at one point.

  • An agreement "in principle" with details worked out in 2013. A full resolution would require reaching an agreement, finalizing the bill and getting it voted on in both the House and Senate. That may not be possible with the time left, according to Jones.

"They could pass legislation establishing a framework of general tax increases and/or spending cuts and allow the new Congress to work out the details early next year."

  • No agreement is reached and the Bush-era tax cuts fully expire. Not only would this increase taxes across the board based on income, it also would make an estimated 20 million additional families subject to the alternative minimum tax (AMT), raise the capital gains rate and tax dividends as ordinary income. Additionally, the child tax credit would be cut by one-half to $500 from $1,000 and the estate tax would revert to 55 percent with a $1 million exemption amount compared to 2012's 35-percent maximum estate tax after a $5.12 million exemption, among other tax impacts.

"Even if we go over the fiscal cliff, Congress could act early next year to reach a compromise and make any agreement retroactive to the beginning of the year," said Jones. "However, this would not be the ideal scenario for most taxpayers, businesses or investors – most of whom would prefer some degree of certainty heading into 2013."

Tax Outcomes for Middle-class Couple

Depending upon the taxpayer's situation, the different proposals could have an impact of a few hundred dollars to several thousand dollars in the taxes they owe.

Below, CCH provides an example of how the current Democratic and Republican proposals would affect a married couple filing jointly with $150,000 in taxable income, $2,500 in capital gains and $500 in dividends.

The free CCH 2013 Fiscal Cliff Estimator (CCHGroup.com/Estimator), allows individuals and tax advisors to compare a taxpayer's 2012 tax liability against the two proposals as well as what would happen if Congress does not act.


Current 2012 tax rates

Full-extension of Bush-era tax cuts (Republican Plan)

Presidential and Senate Democratic proposal

Fiscal Cliff (if Congress does not act)

Income tax rate

28%

28%

28%*

31%

Estimated Income tax

$30,229 (including dividends and capital gains)

$29,916 (including dividends and capital gains)

$29,465 (not including capital gains and dividends)

$34,891 (including capital gains and dividends)

Long-term capital gains

15%

15% (plus 3.8% Medicare Tax on Net Investment Income for some taxpayers)

15%

$375 (plus 3.8% Medicare Tax on Net Investment Income for some taxpayers)

20% (plus 3.8% Medicare Tax on Net Investment Income for some taxpayers)

Dividends

15%

15%

15%

$75 (taxed as capital gains except in excess of the higher income AGI cutoffs, when dividends are taxed as ordinary income)

31%

Standard deduction

$11,900

$12,200

$12,200

$10,150

Personal exemption

$3,800

$3,900 (personal exemption phase-out assumed to be extended)

Proposed to allow the temporary repeal of the personal exemption phase-out to expire

$3,900 (total exemptions that may be claimed by a taxpayer are reduced by 2% for each $2,500, or portion thereof by which the taxpayer's AGI exceeds the applicable threshold)

AMT patch

Yes

Yes

Supported

None. 20 million additional families estimated to be subject to AMT

Payroll tax cut


Not included in Bush-era tax cuts. Social Security rate increases to 6.2% for employees; maximum increase is $2,274

Not discussed. Social Security rate increases to 6.2% for employees; maximum increase is $2,274

Not extended. Rate increases to 6.2% for employees; maximum increase is $2,274

Source: CCH Fiscal Cliff Estimator.

* The tax is estimated based on taxable income. The President's proposal is based on Adjusted Gross Income (AGI), not taxable income. Taxable income is determined by subtracting personal exemptions and either the standard deduction or itemized deductions (among other items) from AGI. Rates could differ slightly based on this differentiation.

About CCH, a Wolters Kluwer business

CCH, a Wolters Kluwer business (CCHGroup.com) is a leading global provider of tax, accounting and audit information, software and services. It has served tax, accounting and business professionals since 1913. Among its market-leading solutions are The ProSystem fx® Suite, CorpSystem®, CCH® IntelliConnect®, Accounting Research Manager® and the U.S. Master Tax Guide®. CCH is based in Riverwoods, Ill. Follow us now on Twitter @CCHMediaHelp. Wolters Kluwer (www.wolterskluwer.com) is a market-leading global information services company. Wolters Kluwer is headquartered in Alphen aan den Rijn, the Netherlands. Its shares are quoted on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices.

 

SOURCE CCH, a Wolters Kluwer business

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example t...
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. According to a recent IDG Research Services Survey this rate of traffic will only grow. What's driving t...
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps, abiding by privacy concerns and making the concept a reality. These challenges can't be addressed w...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
Bit6 today issued a challenge to the technology community implementing Web Real Time Communication (WebRTC). To leap beyond WebRTC’s significant limitations and fully leverage its underlying value to accelerate innovation, application developers need to consider the entire communications ecosystem.
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from hardware to software, or as we like to say, it’s an Internet of many different things. The difference ...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, phone and digital TV services to consumers primarily in rural areas.
"There is a natural synchronization between the business models, the IoT is there to support ,” explained Brendan O'Brien, Co-founder and Chief Architect of Aria Systems, in this SYS-CON.tv interview at the 15th International Cloud Expo®, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com), moderated by Ashar Baig, Research Director, Cloud, at Gigaom Research, Nate Gordon, Director of T...

ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ --  IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's platform-as-a-service. The new platform enables developers to build ap...

An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and assessments, including a decade of leading incident response and digital forensics. He is co-author of t...
Technology is enabling a new approach to collecting and using data. This approach, commonly referred to as the "Internet of Things" (IoT), enables businesses to use real-time data from all sorts of things including machines, devices and sensors to make better decisions, improve customer service, and lower the risk in the creation of new revenue opportunities. In his General Session at Internet of @ThingsExpo, Dave Wagstaff, Vice President and Chief Architect at BSQUARE Corporation, discuss the real benefits to focus on, how to understand the requirements of a successful solution, the flow of ...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Focused on this fast-growing market’s needs, Vitesse Semiconductor Corporation (Nasdaq: VTSS), a leading provider of IC solutions to advance "Ethernet Everywhere" in Carrier, Enterprise and Internet of Things (IoT) networks, introduced its IStaX™ software (VSC6815SDK), a robust protocol stack to simplify deployment and management of Industrial-IoT network applications such as Industrial Ethernet switching, surveillance, video distribution, LCD signage, intelligent sensors, and metering equipment. Leveraging technologies proven in the Carrier and Enterprise markets, IStaX is designed to work ac...
C-Labs LLC, a leading provider of remote and mobile access for the Internet of Things (IoT), announced the appointment of John Traynor to the position of chief operating officer. Previously a strategic advisor to the firm, Mr. Traynor will now oversee sales, marketing, finance, and operations. Mr. Traynor is based out of the C-Labs office in Redmond, Washington. He reports to Chris Muench, Chief Executive Officer. Mr. Traynor brings valuable business leadership and technology industry expertise to C-Labs. With over 30 years' experience in the high-tech sector, John Traynor has held numerous...
The 3rd International @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades.