Written by HyunCheon Kim / Translated by SeungYun Woo
In the beginning of every new year, amended regulations and systems become one of the most interesting issues.
At the very beginning of 2013, the most remarkable change would be the tax increase for high-income earners in the United States with the fiscal cliff agreement. In Massachusetts (MA), not only the change of tax law but also some other big and small changes should be noted.
First of all, the use of plastic bottles will be prohibited in some areas in MA. From the first day of 2013,Concord, located northwest of Boston, enforced a law which requires a ban on the sale of plastic bottled water at stores, restaurants and vending machines. However, some residents and water manufacturers are showing opposition to this regulation.
Another change to be noticed is that medical use of marijuana became legal in MA. One requires a doctor’s prescription to buy medical marijuana, and one can only get it from the places where the MA government has approved its sale. One can buy and keep a maximum 60 days amount of medical marijuana. Since now Massachusetts has admitted medical use of marijuana, New Hampshire remains the only state that does not allow legal medical use of marijuana in New England.
Moreover, victims of domestic violence, sexual assaults, and stalking can now receive legal protection. Both public and private housing residents are able to suspend lease contracts without paying any penaltywhenever they feel a threat to their own safety. In this case, a tenant needs to send a written notice in advance in a reasonable amount of time to the house owner. The owner could ask for independent evidence of the victim’s situation.
When a person appoints a lawyer in MA, he or she must receive a written contract stating the attorney’s fee. According to the lawyer Kiju Sung, all lawyers and others in charge of any legal action must provide a written contract that contains the lawyer’s task, the lawyer’s fee, and other expenditures to their clients. However, this regulation is not applied if the cost of legal advice and the lawyer’s fee is less than $500 and if a lawyer is under a nonprofit organization or is a state-appointed attorney.
The fiscal cliff agreement at first gave hope to the United States by causing a sudden rise of stock markets in New York when they first opened. However, the economic experts are pointing out that it only took care of the urgent fire but the fundamental problem still remains.
The agreement stipulates that the largest part of Americans’ tax burden is not changed but the richest 2% of Americans have to pay more. Here are some breakdowns:
Singles with $400,000 annual income or above ($450,000 or above for couples), need to pay a higher rate of income tax; it has increased from 36% to 39.6%. Also, the tax rates of capital gain and qualified dividend will increase from 15% to 20%.
According to accountant Myung-won Lee, estate taxes also increased to 40% on the value of estates over $5 million.
Capital gain and qualified dividend tax rates are also increased up to 25% from 15% for singles with income over $400,000 and for couples with income over $450,000. Moreover, 3.8% of Medicare fee is levied on the high-income earners with above the fixed amount of investment income, such as interest, dividend, rent income and capital gain.
The agreements reinstates provisions that phase out personal exemptions and deductions for incomes over $250,000 for singles and $300,000 for couples. After the modification, if the Adjusted Gross Income is above the fixed amount, personal exemption and itemized deduction will be restricted by a certain amount of rate.
More changes will be made for Social Security Tax and Medicare Tax. The employee excess of Social Security Tax is raised to 6.2% from 4.2%.
The wage limits for Social Security Tax is raised from $110,110 to $113,700 and 0.9% of Medicare Tax is levied on wages above $200,000.
On the other hand, good news is that the regulations of tax credit, earned income credit and education tax credit are extended for 5 more years.
ⓒ 보스톤코리아(http://www.bostonkorea.com), 무단전재 및 재배포 금지