I just did my taxes on TaxAct, which is the least expensive way compared to TurboTax. If you are a normal middle-elder gay with IRAs, capitol gains and dividend income from stocks or mutual fund investments, you should read this about big changes for NEXT year income tax, 2013.
Future Tax Rates
The current rates of 10%, 15%, 25%, 28%, and 35% will remain, with the addition of a new 39.6% top rate in 2013. This top rate will apply to those making over $400,000 if single; $450,000 if married filing joint; $425,000 if head of household. ****** In 2013, the maximum rate for capital gains will increase from 15% to 20%. However, this only applies to taxpayers with incomes exceeding $400,000 ($450,000 for married filing joint). For taxpayers with ordinary income taxed at a rate below 25%, capital gains and dividends will be taxed at a 0% rate. For taxpayers who are subject to a 25% or greater rate on ordinary income, but whose income falls below the max $400,000/$450,000 threshold, will continue to be subject to a 15% rate on capital gains and dividends. ************
Essentially, for middle income people who have invested and NORMALLY pay 15% on dividend and capitol gains in normal mutual fund growth and stock purchases, we will NO LONGER have to pay tax on that, 0% tax. Of course you have to have your income level at the 25% tax level, which is where I try to keep it with tax tricks.
I thought this would be good and useful news to people trying to predict how to divide their Roth IRA/Traditional IRA contributions for 2013. With this information, it makes much more sense to put it all into a Roth IRA.