That means you can withdraw those funds without paying additional income tax or the 10% early withdrawal penalty.
Some advisers believe the IRS may also be more likely to assert additional income tax penalties after an opt-out, such as civil fraud.
The deal also includes some additional stimulus tax benefits, like a two-year expansion of the Earned Income Tax Credit, the additional child tax credit and a credit to help college students offset tuition costs.
At the margin, a tax on earning additional income will reduce the total income earned and will reduce the tax take to some extent.
FORBES: The Fiscal Cliff: Why Sticking It To The Rich Will Hurt Everyone
They will search public records for evidence of additional unreported income, tax assessor and real estate records for assets held by the non-filer, and records of professional associations and business license bureaus for information on businesses being operated by the non-filer.
FORBES: Non-Filers Beware: Who's That Knocking at Your Door ?
However, if you withdraw money from the plan for a purpose other than eligible college expenses, you will be subject to federal income tax and an additional 10% federal tax penalty on earnings.
Reducing taxes on additional income earned should increase income and the tax on that income to some extent.
FORBES: The Fiscal Cliff: Why Sticking It To The Rich Will Hurt Everyone
Then, beginning in 2013, high-income folks will pay an additional 3.8% Medicare tax on investment income, including capital gains, bringing the federal capital gains tax bite up to 23.8%.
They will pay an additional 0.9% in Medicare tax, and a proposed (additional) 3.8% tax on unearned income (including interest, dividends and capital gains).
Worse, Rhode Island has lost the additional tax revenue that this income could have produced.
FORBES: Study Finds Rhode Island's Estate Tax Causes Exodus Of People And Money
Gingrich proposed as well to abolish the capital gains tax altogether, which is just an additional layer of taxation on capital income, in addition to the individual income tax, the corporate income tax, and the death tax.
Under the 2010 health law, high-income households will pay an additional 0.9 percent Medicare payroll tax and a new 3.8 percent levy on investment income such as capital gains and dividends.
FORBES: Taxes and Paul Ryan's Budget: What's Clear, And What Isn't
That means retirement savers who want to move assets into a Roth 401(k) account from their pretax 401(k) must be certain they can pay the taxes involved, and that they are prepared for any additional tax ramifications triggered by the temporary income bump.
And Britain is also well ahead of the United States, where the current top rate of federal income tax is 35%, though additional state levies can add substantially more.
ECONOMIST: A fresh political row over the taxation of high earners
Starting on January 1, high income taxpayers will have an additional 90 basis point Medicare tax on wages that exceed a certain limit.
Nearly 30 million additional taxpayers will become subject to the AMT on their 2012 income tax returns.
This means that, absent enactment of a new patch in the near future, nearly 30 million additional taxpayers will become subject to the AMT on their 2012 income tax returns.
The increase in growth made possible by these initiatives also would set the stage for additional growth augmenting policies including reform and simplification of the personal income tax code and restoration of gold as a standard of value for the dollar.
They will also pay an additional 2.5 per cent "solidarity tax" on their income.
Meanwhile, individuals with taxable income of more than 10m rupees will also pay an additional tax of 10%.
Broadening the personal income-tax base by closing loopholes will generate substantial additional revenue while minimizing increases in marginal rates that could stifle risk-taking and robust growth.
WSJ: Lloyd Blankfein: The Business Plan for American Revival
If your adjusted gross income next year is lower than the threshold for the additional Medicare tax levels, your capital gains rate for 2013 might only be 20% (and it could even remain at 15%, depending on how the new rules end up after negotiations).
If the vote passes, investors across all income levels will see the Bush tax cuts extended by an additional two years, as well as, a one year reduction to employee Social Security taxes and an extension to unemployment benefits.
FORBES: Tax Compromise Helps Some Investors More than Others
So, how much additional economic growth would we need to get to pay for eliminating the corporate income tax entirely on a present value basis?
FORBES: Let's Finance Supply-Side Tax Cuts With Laffer Shares
Exhibit A is a progressive tax code and the penalty it imposes on earning marginal, or additional, income.
Under their proposal even top bracket taxpayers would pay a maximum rate on this investment income of 20 percent in 2013 (plus an additional 3.8 percent under the tax provisions of the 2010 health law).
FORBES: Senate Democrats Make Curious Choice To Keep Dividend Taxes Low
The 0.9 percent additional payroll tax for Medicare and unprecedented new 3.8 percent Medicare tax on investment income will have disproportionately large effects on the very entrepreneurs whose talents we should be rewarding rather than punishing.
An additional source of cash also resulted from front running of bonus income and other income into December, 2012 to avoid the tax hikes.
FORBES: Huge U.S. Equity Fund Inflows Being Funded By Tax Front Running Income
应用推荐