Omnibus budget reconciliation act of 1993
Act designed to help reduce the federal deficit by approximately $496 billion over five years through a restructuring of the tax code. The following include some of the major provisions that will have an impact, on financial planning:
- Establishment of a new top tax rate on ordinary income (wages, interest, dividends, etc.) of 36% on taxable income alone: Applicable Filing Status ThresholdMarried individuals filing joint returns $ 140,000Heads of households 127,500Unmarried individuals 115,000Married individuals filing separate returns 70,000Estates and trusts 5,500
- Establishment of a new 10% surtax on individuals with taxable income in excess of $250,000; except for married individualsfiling separately the surtax applies to taxable income over $125,000.
- Establishment of a new 39.6% marginal tax rate, which includes the above 10% surtax, to be applied to taxable income in excess ofthe $250,000. Long-term capital gains are not subject to the higher rates, and will not be taxed at a rate higher than 28%. Since thepassage of this Act, the maximum long-term capital gains tax has been reduced to 20%.
- Establishment of a new two-tiered progressive Alternative Minimum Tax rate schedule for noncorporate taxpayers as follows: married individuals filing a joint return would pay a 26% rate on Alternative Minimum Taxable Income up to $175,000, and a 28% rate on Alternative Minimum Taxable Income in excess of $175,000; married individuals filing separate returns would pay a 28% rate on Alternative Minimum Taxable Income in excess of $87,500.
- Exemptions under the Alternative Minimum Tax increased as follows: to $45,000 from $40,000 for married individuals filing jointreturns; to $22,500 from $20,000 for married individuals filing separate returns, as well as estates and trusts; to $33,750 from $30,000 for single individuals.
- Elimination of the dollar limitation cap on self-employment income and wages subject to medicare hospital insurance.
- Establishment of new maximum estate and gift tax rates as follows: for transfers between $2.5 million and $3 million, a 53% rateis applied; for transfers in excess of $3 million, a 55% rate is applied.
- Deductible of allowable meals and entertainment to the extent of 50% of costs.
- No deduction for club dues permitted; however, particular business expenses such as meals and entertainment incurred at a clubare deductible to the extent of 50% of costs.
- For the publicly held corporation, no deduction permitted for compensation paid over $1 million for any one of its highest fiveexecutives.
- For qualified retirement plan contributions, a reduced compensation ceiling from $235,840 in 1993 to $150,000 beginning in1994. The $150,000 ceiling is to be indexed according to the inflation index each year beginning in 1996.
- For Social Security recipients, up to 85% of Social Security benefits taxable for married retirees with income in excess of $44,000and for single retirees income in excess of $34,000.
- For self-employed individuals, a deduction as a business expense up to 25% of the premiums paid for health insurance coverage forthat individual, spouse, and dependents.
- Repeal of the luxury excise tax of 10% on boats, aircraft, jewelry, and furs. The luxury excise tax of 10% indexed for inflationremains for automobiles in excess of $30,000.
- Maximum corporate tax rate increased to 35% on taxable income above $10 million. For the personal service corporation, the flatrate is increased to 35%.
Real Estate Dictionary of Real Estate Terms
Definition of Real Estate Terms
Are you confused and overwhelmed by the extensive lexicon of real estate
terms and words? Well look no further, here is where the PROS go. Real Estate Glossary
Every person working in real estate or planning to buy or sell real estate
can benefit by using our free real estate dictionary. This dictionary of
real estate terms is the most extensive in the industry and is used by many
*real estate agents, real estate brokers, mortgage brokers, Realtors *and
instructors in major real estate schools across the country and the world.
If you are interested to:
Buy a Home in Hollywood,
Sell a Home in Hollywood,
Rent a Home in Hollywood,
Commercial in Hollywood
(1) Real Estate Agents found in Hollywood city.
If you are interested in other Real Estate Glossary terms