5 Must Know 'U.S. Tax Law' Changes Impacting NRIs
2. Investment Income Rates
For most tax payers the long term capital gains tax rate remains almost same i.e. 15 percent. But for those who comes under the highest tax slab the maximum increase in the tax rate will be 20 percent rising from 15 percent. Therefore single filers who are earning more than $400,000 and married joint filers earning more than $450,000 will be entitled to pay tax at 20 percent on their long term capital gains.
3. Payroll Taxes
For 2010-2012, the Social Security tax preservation rate on your salary was provisionally reduced from the normal 6.2 percent to 4.2 percent. This means that the employees paid 4.2 percent in payroll tax only for two years, i.e. 2011 and 2012, for the financial year 2013 employees will be again paying 6.2 percent.
For those who are self employed the Social Security tax component of the self-employment tax was reduced to 10.4 percent from 12.4 percent but unfortunately the holiday ended with the year 2012 and from 2013 new tax rates were implemented.
