The legislation preserves lower tax rates passed during President George W. Bush's administration and the AMT was expanded to cover inflation. Even though this new bill has helped millions of Americans avoid higher taxes come April 15, they will still pay more in taxes for 2013.
The extension of the Social Security payroll tax cut was allowed to expire. Previously, it was 4.2%; now it goes back up to 6.2%. This means that the average American will see more Social Security taken out of their paycheck. For someone making $50,000, there will be about $80 less a month in their paycheck.
In response to the President’s signing, Liberty Tax has spent the last 24 hours updating and educating its tax preparers in the Liberty Tax Rapid Class on the changes the Taxpayer Relief Act implicates. One of these changes includes individuals earning more than $400,000 and families with income of more than $450,000 who will see their federal tax rates rise to 39.6 percent.
Now more than ever, taxpayers will want to get the maximum amount of tax credit and deductions available to them. At Liberty Tax, a certified tax preparer can help taxpayers make the most of their tax return. Some issues, however, have not changed.
The bill extends tax credits for families with children; extends unemployment insurance; continues existing Medicare payment rates for physician services through Dec. 31; extends farm bill policies and programs through Sept. 30, and extends the tuition tax credit for families.
The cliff was averted but not the crisis with the massive U. S. deficit still looming. Further discussions on deep spending cuts and the federal debt limit will happen in the coming months.
JTH Holding, Inc. (NASDAQ: TAX) is the parent company of Liberty Tax Service. As the fastest-growing tax franchise ever, Liberty Tax Service has prepared over 10 million individual income tax returns. Founded in 1997 by CEO John T. Hewitt, Liberty Tax Service is the only tax franchise on the Forbes“Top 20 Franchises for the Buck.”
According to the International Franchise Association’s Franchise Business Economic Outlook, the number of franchise units in the United States declined from 2009 until 2012. Currently there are approximately 27,000 fewer total franchise establishments operating in the United States than there were in 2008 (774,016 in 2008 compared to 746,828 in 2012). In spite of this downward trend, Liberty Tax Service increased its number of locations from 2,695 in 2008 to 4,183 in 2012.
Liberty Tax Service stands behinds community enrichment efforts by sponsoring various non-profit organizations and urging their employees and franchisees to give back to their communities. To extend that community support, Liberty also offers an online tax service, eSmart Tax, which enables some to do their own taxes wherever there’s a computer. eSmart Tax is backed by the tax professionals at Liberty Tax Service and its nationwide network of over 30,000 tax preparers, ready to offer their assistance at any time.
Contact Liberty Tax Service about franchise opportunities.