After much contention,Congress passed the American Taxpayer Relief Act of 2012, and President Obama signed the legislation on January 2, 2013. The Act avoids automatic sunset provisions that were scheduled to take effect beginning 2013 under the so-called “Bush-era tax cuts.” Though the Act is nowhere as comprehensive as what many lawmakers envisioned, there are positive aspects for a majority of taxpayers. The summary below highlights key provisions from the Act.

The Act makes permanent the lower Bush-era income tax rates for all taxpayers with taxable income at or below certain thresholds — $400,000 for single filers, $450,000 for joint filers, and $425,000 for heads of household. Individual marginal tax rates of 10, 15, 25, 28, 33, and 35 percent at the end of 2012 will remain the same, but there will be an additional 39.6 percent bracket for income exceeding the threshold amounts listed above.

In This Issue:

- Major Tax Provisions Affecting Individuals

- Major Tax Provisions Affecting Businesses

- Federal Estate, Gift, and Generation-Skipping Taxes