Dennis Dachtler has been the President of Dachtler Wealth Management for 23 years. Through Dachtler Wealth Management, Dennis Dachtler assists clients with family wealth and retirement planning, investment advice and monitoring, and more. With many clients wondering about the tax changes proposed for 2013, Dennis Dachtler recently took some time to answer several issues about which Dachtler Wealth clients are concerned. Below, Dennis Dachtler addresses these questions about the changes to tax laws in 2013.
Q: Are these tax changes confirmed?
Dennis Dachtler: These are only proposed tax changes at this point and have not yet been passed into law.
Q: Why are there such big changes this year?
Dennis Dachtler: The Bush tax cuts are set to expire this year. Unless these cuts are extended, there will be some sweeping changes.
Q: What changes will there be in capital gains taxes?
Dennis Dachtler: The Bush tax cuts brought capital gains taxes down to their current rate of 15%. Once these tax cuts expire, taxes will return to pre-2001 rates of nearly 24%.
Q: What does this mean for the average taxpayer?
Dennis Dachtler: Well, the proposed legislation primarily impacts those who buy and sell real estate for profit. If someone buys a home for $100,000 and sells it for $150,000, the $50,000 earned from that sale would be taxed at 15%, at current rates.
Q: I hear the “top dividend tax rate” is increasing substantially. Who will this affect?
Dennis Dachtler: The top dividend tax, which is proposed to increase from 15% to 44%, targets income earned from certain investments. Currently this income is taxed under long-term capital gain rates but the proposal has that income being taxed as regular income.
Q: Tax brackets will increase on investment income as well. Please explain what this impacts.
Dennis Dachtler: This increase from 35% to 44% will affect short-term capital gains, interest, rental income, royalties, and annuities. Under the proposed tax increases, the cap on estate tax will go from five million dollars to one million dollars.
Q: What is this Medicare tax I keep hearing about?
Dennis Dachtler: This 3.8% Medicare tax will be levied on investment income, if passed. This tax will largely affect wealthier households.
Dennis Dachtler obtained a B.S. in marketing and communications before opening Dachtler Wealth Management. He currently lives in California with his wife and family.
Securities and investment advisory services are offered solely through Ameritas Investment Corp. (AIC). Member FINRA/SIPC. AIC and Dachtler Wealth Management are not affiliated. Additional products and services may be offered through Dennis Dachtler or Dachtler Wealth Management that are not offered through AIC. The opinions and views stated in this publication are solely those of Dennis Dachtler and should not in any way be considered to be an endorsement by Ameritas Investment Corp.
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