Big tax surprise looming for high earners

 Published: Thursday, 26 Dec 2013 | 11:52 AM ET

 

By: Jeff Morganteen | Producer, CNBC.com

Tax shock for high earners looms

Thursday, 26 Dec 2013 | 10:29 AM ET

Joseph Perry, Marcum Partner, explains why high income earners are in for a big tax shock this year and shares how effective tax planning can help ease the tax bill.

 

Attention high-income earners: Be prepared to pay more in this year's tax bills.
How much more? That depends on your income, deductions and exemptions, but according to Joe Perry, a partner overseeing tax and business services at Marcum, about 1,200 of his clients earning more than $400,000 will see their 2013 tax bills grow by an average of 7 percent compared to 2012. The changes amounted to a total of $250 million more in taxes this year, he told CNBC on Thursday.
"People are aware of the changes, but I don't think they are prepared for the changes," Perry said on "Squawk on the Street." 

(Read more: Five tips for year-end tax planning)

Clint Hild | E+ | Getty Images

 

After President George W. Bush's tax cuts for the highest income bracket expired earlier this year, married couples filing jointly with income greater than $450,000 face a 39.6-percent income tax—up from 35—plus a 20 percent tax on qualified dividend and long-term capital gains, up from 15 percent. The new tax rules also limited the kind of deductions joint filers earning more than $300,000 could file.

"You have to plan for a two-year period," Perry said. "You can't just look at one year. You want to understand where you're going to be in 2013 and 2014. Then when you look at the years you want to see if you're coming up on any of the thresholds."

Perry said high-income earners should think about gifting appreciated assets to take advantage of generous deductions.


—By CNBC's Jeff Morganteen. Follow him on Twitter at

@jmorganteen

and get the latest stories from "Squawk on the Street." 

CNBC Video of Article: http://www.cnbc.com/id/101297236