| WASHINGTON, April 14
WASHINGTON, April 14 For wealthy U.S. investors
who have not been paying attention, their 2013 tax returns,
which must be filed by Tuesday, may contain a rude surprise:
With the deadline for filing hours away, tax professionals
across the country said some clients have been surprised to
learn the Internal Revenue Service was taking a larger bite.
"People are caught off guard," even though 2013's tax
increases have been on the books for more than a year, said
Robert Siegmann, chief operating officer at Financial Management
Group Inc, an advisory firm in Cincinnati.
A slew of new tax increases took effect for high-income
individuals last year, as well as new limits on how much wealthy
Americans can lower their incomes by using tax deductions.
For some people, one result of not paying attention was
under-withholding of taxes from their paychecks, especially
among those who racked up big gains from stock options on the
back of 2013's strong stock market.
Claudia Hill, an enrolled agent licensed tax preparer in
Cupertino, California, said one of her clients, a married couple
working for Google Inc, had to write a check for an
additional $71,000 to the Internal Revenue Service.
She said clients employed by Apple Inc and Netflix
were also shocked that they under-withheld and owed
more ordinary income taxes. "They're working so much they don't
think about taxes," Hill said.
New taxes effective last year included an increase to 20
percent from 15 percent in capital gains and interest tax for
individuals earning $400,000 or more and married couples filing
jointly who make above $450,000.
The new Affordable Healthcare Act imposed a 3.8 percent tax
on investment income for individuals earning $200,000 and
households making $250,000. The ACA law also added new 0.9
percent tax on ordinary income for the same high earners.
In addition, the top tax bracket for ordinary wage income
went up to 39.6 percent, from 35 percent, for individuals making
$400,000 and couples earning $450,000.
Wealthy taxpayers hoping to lower their taxable gains last
year were stung by the restored Pease limits on itemized
deductions, including home mortgage interest and charitable
giving for taxpayers making more than $250,000.
(Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh)