Entertainer Arthur Godfrey years ago said, "I’m proud to pay taxes in the United States; the only thing is, I could be just as proud for half the money." Unfortunately, for high-income taxpayers, the federal tax burden is growing in a number of ways starting in 2013. To make things more confusing, the definition of who is a high-income taxpayer varies from rule to rule. Here is a roundup of the tax rules exclusively for high-income filers and the definitions that apply.
Highest Tax Rates
A person who is a high-income taxpayer is subject to a top federal income tax rate of 39.6 percent instead of the former top rate of 35 percent (Code Sec. 1(i)(3)(A)). High-income taxpayers also pay 20 percent on long-term capital gains and qualified dividends instead of the usual rate of 15 percent (Code Sec. 1(h)(1)(D)).
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