Details of Senate bill averting 'fiscal cliff'

Details of Senate bill averting 'fiscal cliff'

Posted: Updated:

The Associated Press 

Highlights of a bill Congress passed Tuesday aimed at averting wide tax increases and budget cuts scheduled to take effect with the new year. The measure would raise taxes by about $600 billion over 10 years compared with tax policies that were due to expire at midnight Monday. It would also delay for two months across-the-board cuts to the budgets of the Pentagon and numerous domestic agencies.

The House and Senate passed the bill on Tuesday and sent it to President Barack Obama for his signature.

Highlights include:

—Income tax rates: Extends decade-old tax cuts on incomes up to $400,000 for individuals, $450,000 for couples. Earnings above those amounts would be taxed at a rate of 39.6 percent, up from the current 35 percent. Extends Clinton-era caps on itemized deductions and the phase-out of the personal exemption for individuals making more than $250,000 and couples earning more than $300,000.

—Estate tax: Estates would be taxed at a top rate of 40 percent, with the first $5 million in value exempted for individual estates and $10 million for family estates. In 2012, such estates were subject to a top rate of 35 percent.

—Capital gains, dividends: Taxes on capital gains and dividend income exceeding $400,000 for individuals and $450,000 for families would increase from 15 percent to 20 percent.

—Alternative minimum tax: Permanently addresses the alternative minimum tax and indexes it for inflation to prevent nearly 30 million middle- and upper-middle income taxpayers from being hit with higher tax bills averaging almost $3,000. The tax was originally designed to ensure that the wealthy did not avoid owing taxes by using loopholes.

—Other tax changes: Extends for five years Obama-sought expansions of the child tax credit, the earned income tax credit, and an up-to-$2,500 tax credit for college tuition. Also extends for one year accelerated "bonus" depreciation of business investments in new property and equipment, a tax credit for research and development costs and a tax credit for renewable energy such as wind-generated electricity.

—Unemployment benefits: Extends jobless benefits for the long-term unemployed for one year.

—Cuts in Medicare reimbursements to doctors: Blocks a 27 percent cut in Medicare payments to doctors for one year. The cut is the product of an obsolete 1997 budget formula.

—Social Security payroll tax cut: Allows a 2-percentage-point cut in the payroll tax first enacted two years ago to lapse, which restores the payroll tax to 6.2 percent.

—Across-the-board cuts: Delays for two months $109 billion worth of across-the-board spending cuts set to start striking the Pentagon and domestic agencies this week. Cost of $24 billion is divided between spending cuts and new revenues from rule changes on converting traditional individual retirement accounts into Roth IRAs.

  • Your MoneyMore>>

  • Getting married? You may want your prenup to protect your 'digital privacy'

    Getting married? You may want your prenup to protect your 'digital privacy'

    Friday, April 18 2014 10:11 PM EDT2014-04-19 02:11:48 GMT
    Realty TV star Kim Kardashian probably wished she did have one before she walked down the aisle with Kris Humphries. We might never have known about Tiger Woods' cheating ways if he had one. And figure skater Johnny Weir is insisting on one as part of his post-nuptial agreement. What is it? A digital privacy clause. New York City divorce lawyer Bettina Hindin says once you push "send" someone can find it.
    Realty TV star Kim Kardashian probably wished she did have one before she walked down the aisle with Kris Humphries. We might never have known about Tiger Woods' cheating ways if he had one. And figure skater Johnny Weir is insisting on one as part of his post-nuptial agreement. What is it? A digital privacy clause. New York City divorce lawyer Bettina Hindin says once you push "send" someone can find it.
  • Grocery-store etiquette

    Grocery-store etiquette

    Friday, April 18 2014 7:24 PM EDT2014-04-18 23:24:07 GMT
    Whether barricading shopping aisles with abandoned carts, massaging every piece of fruit in the building, or blankly staring at a shelf of items so no one else can pick one, grocery store pests can turn a quick trip to restock your fridge into a nightmare.
    Whether barricading shopping aisles with abandoned carts, massaging every piece of fruit in the building, or blankly staring at a shelf of items so no one else can pick one, grocery store pests can turn a quick trip to restock your fridge into a nightmare. In the hope of gently educating those unclear on grocery-shopping etiquette, we asked you to help us put together a list of what not to do.
  • Expert: credit cards are not fully secure

    Expert: credit cards are not fully secure

    Friday, April 18 2014 6:49 PM EDT2014-04-18 22:49:51 GMT
    Another week and another credit card hacking at a major retailer. This time it was Michael's craft store. Consumers are uneasy because current credit card technology is antiquated. "The fact is you cannot protect your credit cards, you can't every time you give it out it is vulnerable to fraud," says Robert Siciliano, McAfee identity theft expert.
    Another week and another credit card hacking at a major retailer. This time it was Michael's craft store. Consumers are uneasy because current credit card technology is antiquated. "The fact is you cannot protect your credit cards, you can't every time you give it out it is vulnerable to fraud," says Robert Siciliano, McAfee identity theft expert.
Powered by WorldNow

KTBC FOX 7
119 East 10th Street
Austin, TX 78701

Phone: (512) 476-7777
Fax: (512) 495-7001

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices