Assistant Professor OSU Extension
Putnam County

The following article is a summary of farm tax changes in the Taxpayer Relief Bill written by David Marrison and Chris Bruynis, OSU Extension educators.

The Taxpayer Relief bill permanently retains the 10-percent, 15-percent, 25-percent, 28-percent and 33-percent income tax brackets. The 35-percent tax bracket ends at $400,000 for single filers and $450,000 married filing jointly. Above this threshold, there’s a new 39.6-percent tax bracket. Likewise, the bill permanently retains the 0-percent and 15-percent tax rates on qualified dividends and long-term capital gains, and adds a new 20-percent tax rate that would apply to taxpayers who fall within the new 39.6-percent tax bracket. The new capital gains tax rates for 2013 and future years will be:
— 0 percent applies to capital gains income if a person is in the 10-percent and 15-percent tax brackets;
— 15 percent applies to capital gains income if a person is in the 25-percent, 28-percent, 33-percent, or 35-percent brackets; and
— 20 percent applies to capital gain income if a person is in the 39.6 percent bracket.