Retroactive tax increase passes
Proposition 30 retroactively increases income taxes effective January 1, 2012. The following rate increases are effective for seven years:
Proposition 30 Ballot Initiative
10.3% (1% increase) on income of:
- $250,001–$300,000 for single/MFS;
- $340,001–$408,000 for HOH;
- $500,001–$600,000 for MFJ.
11.3% (2% increase) on income of:
- $300,001–$500,000 for single/MFS;
- $408,001–$680,000 for HOH;
- $600,001–$1,000,000 for MFJ.
12.3% (3% increase) on income of:
- More than $500,000 for single/MFS;
- More than $680,000 for HOH;
- More than $1,000,000 for MFJ.
Note: Income in excess of $1 million is also subject to the 1% mental health surcharge.
Proposition 30 also increases the state sales tax rate by 0.25% for four years, beginning January 1, 2013, bringing the standard statewide rate to 7.50% (currently 7.25%).
Proposition 38, Tax to Fund Education and Early Childhood Programs, failed; and
Proposition 39, the single sales factor mandate, passed, so most multi-state corporations will be required to use the single sales factor in 2013.
States Announce Hurricane Sandy Tax Filing Relief
Various state governments, like New York and New Jersey, have given an extension of time for filing tax deposits or tax returns in response to the business interruption created by Hurricane Sandy. Should you find that your organization did not timely pay or file and needs relief, please contact your RubinBrown team member to see if we can assist you with the resolution for your issue. The IRS has also issued Informational Release 2012-82 granting various extensions due to Hurricane Sandy.
Under U.S. Treasury Department guidelines, we hereby inform you that any tax advice contained in this communication is not intended or written to be used, and cannot be used by you for the purpose of avoiding penalties that may be imposed on you by the Internal Revenue Service, or for the purpose of promoting, marketing or recommending to another party any transaction or matter addressed within this tax advice. Further, RubinBrown LLP imposes no limitation on any recipient of this tax advice on the disclosure of the tax treatment or tax strategies or tax structuring described herein.
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