Helping Your Business Grow President Edward Kearney Chamber of Commerce
February 2013
From the desk of Scott Kadrlik, Chamber Chairman Hi Taxpayers! I am Scott Kadrlik, CPA/PFS. A Look at Taxes For 2013-----They are going up!
Vice Chairman Jodi Kurtz Warners’ Stellian
Past Chairman Eric Iverson Iverson Consulting
Secretary Misty Scholler Anchor Bank
Treasurer Guy Gunner Gunners Garage
Jane Hill Culver’s
Bethany Harris BMO Harris Bank
Nick Martinez Send Out Cards
John Wortman American Legion
Chamber Administration Kristy Cleveland Business Manager
The fiscal cliff that threatened to reduce U.S GDP by 5% was narrowly averted on New Year’s Day. In its place, we have the American Taxpayer Relief Act, with a projected fiscal drag to GDP of 1.5%. If you have not heard by now, below are just a few of the new policy highlights recently enacted:
* The top marginal tax rate is 39.6% for couple’s filing jointly with incomes in excess of
$450,000. This was previously 35% for couples who had income in excess of $388,500. In addition, those with income in excess of $450,000, the rate on dividends and long term capital gains will move up to 20% from 15%. * The Personal Exemptions and Itemized Deductions are now phased out for joint filers with income in excess of $300,000. (i.e. Mortgage Interest and Charitable Deductions) * The tax rate for estates in excess of $5,000,000 increased to 40% from 35%. * Everyone, regardless of income will now pay 6.2% in social security payroll tax, up from 4.2% in 2012, on the first $113,700 of earnings. State Taxes are Changing! The Governor recently announced his budget plan for 2014 and it includes a significant change in Sales Tax, Income Tax and Real Estate tax. The proposal includes a decrease in the sales tax rate with an expansion in the items subject to tax including clothing, haircuts and services such as legal and accounting fees. Individual tax rates will also increase for higher income earners. The expansion of these taxes will feed a significant appetite for spending that was also proposed. The Minnesota Chamber of Commerce is leading the charge in demonstrating the detrimental effect that the increased taxes will have on a slow moving economy. I recommend that you contact your legislator at both the State and Federal level to voice your opinion on the proposal and recent tax changes. With this information, we have a fair idea what the rules are going to be for the rest of 2013 so we have to look to ourselves to design strategies that will advance our businesses and compete in the local and global marketplace. Reducing costs, technology expansion, improving customer service and enhancing the delivery of our products are great places to start. Look around your businesses and decide which strategies will make you stronger and better able to advance when the economy starts to improve. The Chamber meets for you! Be sure to attend any one of the many chamber functions held monthly. The Coffee Connections, monthly Luncheons and Business after Hours are a great way to meet your business neighbours as well as sell yourself to those who attend. Happy Valentine’s Day This is Valentines month so be sure to let your spouse, significant other and loved ones know how much you care for them. Flowers, Candy and even a small trinket are great but don’t forget to give them a call or a hug. Jewelry is always a nice gift, but be careful; One year I bought a ring for my wife on Valentine’s Day. It wasn’t a nice diamond ring, but rather a Mood ring. Don’t shake your head. I know now what I did wrong. I do have to say though that the Mood ring worked very well. When my wife was happy the Mood ring changed to a gorgeous blue color. But when she was upset it left a red mark on my forehead. Have a great month. Remember, File early and file often. Scott Kadrlik, CPA/PFS Meuwissen, Flygare, Kadrlik & Associates, P.A.
952-541-1996 scott@mfkcpa.com