The Fiscal Cliff Has Been Avoided - For Now - Part 2

More meat-and-potatoes about the bill that avoided the Fiscal Cliff…

CLASS ACT REPEAL: The American Taxpayer Relief Act of 2012 repeals the CLASS Act, and provides for the establishment of a Commission on Long-Term Care. According to some reports, President Obama agreed to repeal CLASS if Republicans agreed to raise taxes on the wealthy. Most experts believe that CLASS won’t be implemented until a Democratic majority in both houses makes changes in its structure and funding.

COMMISSION ON LONG-TERM CARE: The bill stipulates that the Commission on Long-Term Care will “develop a plan for the establishment, implementation, and financing of a comprehensive, coordinated, and high-quality system that ensures the availability of long-term services and supports.” The President, Senate Majority Leader, Senate Minority Leader, Speaker of the House, and House Minority Leader will each appoint three members, for a total of 15. These members will represent the interests of consumers, seniors, family caregivers, health care workers, private long-term care insurers, state insurance departments, and state Medicaid agencies.

ADDITIONAL ITEMS: The new bill will also include various tax extensions, among them the deduction of state and local general sales taxes, and the credit for energy-efficient appliances. Federal unemployment benefits would be extended for a year. The bill also extends Medicare programs important to seniors, including payment for outpatient therapy services and Advantage plans for people with special needs.

CHALLENGES AHEAD: This bill still doesn’t provide solutions to the sequester or the debt-limit debate. We reached the legal borrowing limit on December 31. The debt issuance suspension will last only through February 28. So Congress doesn’t have much of a honeymoon before the debate starts again. And when it’s finished with the debt-ceiling debate, Congress will have to find an answer for sequestration…and a means of financing government after the Continuing Resolution expires on March 27.

The 113^th Congress will be dealing with issues such as tax reform, non-retirement accounts, exemptions, “loopholes,” and charitable deductions – along with hot-button entitlement programs such as Medicaid and Medicare.

You have to be a lawyer to understand it all. But we can help. Because we’re Elder Law attorneys.

At The Law Offices of Alice Reiter Feld & Associates, we’ve been helping South Florida families figure out the answers for 33 years. And we’ve helped them protect themselves from “complications,” with comprehensive estate planning, wills, trusts, powers of attorney, long-term care planning, asset-protection plans, and assistance with Medicaid and the VA.

We can help you un-complicate things, too. And we’re just a phone call away.

The Fiscal Cliff Has Been Avoided - For Now - Part 1

It’s complicated. But, complicated or not, it’s going to affect everyone – especially Boomers and Seniors.

The American Taxpayer Relief Act of 2012 was actually passed by the Senate in 2013…at 2 a.m. on New Year’s Day. After speculation on New Year’s Day on whether Speaker Boehner would bring the bill to a vote - or if the House would add amendments likely be rejected by the Senate - the House eventually passed the bill at 10:45 p.m. And President Obama signed it the next day.

The bill addresses the Bush-era tax rates, estate and gift tax rates, Medicare reimbursement, and the sequester, among numerous other issues.

TAX RATES: The bill permanently extends current tax rates for individuals earning less than $400,000 and couples earning less than $450,000. Those earning more will see an increase from 35% to 39.6%. Wealthy folks will see an increase from 15% to 20% on capital gains and dividends. Individuals earning above $250,000, and married couples earning more than $300,000, will see a phase-out of the personal exemption.    

ESTATE TAX: The estate tax exemption will remain $5.12 million per person, but will be adjusted for inflation. The top rate will grow from 35% to 40%. Portability’s extended, as well, and the gift tax exemption will remain at $5 million.

PAYROLL TAX: This tax, which funds Social Security, has been at 4.2% since 2011, but will now revert back to the previous of 6.2%.

“DOC FIX”: This provision prevents the scheduled 27% reimbursement cuts to Medicare physicians this year.

OLDER AMERICAN FUNDING: Funding has been increased for the Older Americans Act and similar programs. This year only, Area Agencies on Aging will receive an additional $7.5 million, and Aging and Disability Resource Centers an additional $5 million.

The National Center for Benefits and Outreach Enrollment will receive an additional $5 million, and Medicare State Health Insurance Programs will receive an additional $7.5 million.

As I said…it’s complicated. But we can help.

At the Law offices of Alice Reiter Feld & Associates, we’ve been advising South Florida families on financial issues for 33 years. We’ve helped thousands of them, with proactive measures to see them through any legislative changes. And we help secure their futures, with comprehensive estate planning, wills, trusts, powers of attorney, long-term care planning, asset-protection plans, and assistance with Medicaid and the VA.

We can help protect you and your family. We’re just a phone call away.