LAS VEGAS — Congress is likely to take action to soften the blow of a wide range of federal tax increases scheduled to take effect next year, but trucking companies still should plan for the potential outcomes, two tax accountants said here.
Barbara Koosa Ryan and Randolph Smith, two tax partners in the firm Grant Thornton, used the term “taxmageddon” to refer to the scheduled increases, which include a change in the top income tax rate to 39.6%, from the current 35%.
The increases are because of a number of factors, including the expiration of the George W. Bush-era tax cuts and automatic increases caused by last year’s Budget Control Act.
“Capital gains [taxes] are going to go from 15% to 20%,” Koosa Ryan said, in addition to the income tax increase. “Dividends are going to go from 15% to 43.4%. We’re going to see a phase-out begin on automatic deductions for personal exemptions. We’re going to have increases in Medicare taxes.”
All the tax changes are scheduled to take effect Jan. 1. But Koosa Ryan predicted that Congress and President Obama would pass legislation to lessen the expected increases.
“Congress and the Obama administration don’t want this to happen,” she said in a Monday session at American Trucking Associations’ Management Conference and Exhibition. “But this is exactly where we’re going to be if there is no legislation.”
