American Tax Payer Relief Act

     

  The new tax law—the American Tax Payer Relief Act of 2012—is forcing retirees to take a closer look at their tax strategies in retirement and, for some, it means big changes in how they save, invest and draw down their resources.

First, there is a new top income tax bracket and a new top rate for capital gains and dividend income for individuals, estates and trusts.

Next, itemized deductions and personal exemptions are phased out for high-income taxpayers. (There’s a broader definition of who falls into that category than applies to the new tax rates.) And finally, everyone who earns wages or has self-employment income will contribute more to Social Security through their payroll taxes.