A lot of things happened in 2013. A new pope was elected, JP Morgan was slapped with a record $13 billion penalty and Lou Reed took a permanent walk on the wild side. But one of the most impactful to many of us (or at least to our wallet) was a series of changes that were enacted in the United States tax code.
Some of these changes were big headlines while others may have slipped through relatively unnoticed. But with one year under our collective belts and a second year rapidly coming to a close, it seems like a good time to take a look at a few of the primary changes that impact the real estate investor. Before we launch into this, I need to state my requisite disclosure. I’m a real estate guy with just enough knowledge of taxation to make me dangerous. Left to my own devices, I would be in trouble, probably a lot of trouble. Fortunately, I have a friend named Mark the CPA. So if you have additional questions on the material below, please consult your tax advisor.
We use a system of taxation that is built on a concept called “progressive tax rates.” In short, the more money you make, the higher share of taxes you will pay. The most obvious and significant change made was adjusting the gates, called brackets. Prior to the tax code changes, the 10% bracket extended up to $8,700. After the tax code changes, this bracket was expanded to $9,075. Click here for full article.