Mergers and Acquisitions

Some business sells have tax implication and below is a list of some of the changes coming over the next couple of years.

What Happens January 1, 2012?

The payroll tax reduction, temporarily enacted for 2011, is scheduled to expire January 1, 2012. Absent further Congressional action, employees will see a reduction in their take-home pay, reflecting the return of the Social Security payroll tax rate to 6.2 percent from the 4.2 percent rate applicable to employees for 2011. President Obama has proposed an extension of the payroll tax cut into 2012 at a 3.1 percent rate on employees, instead of the 4.2 percent rate that was in effect for 2011. But the proposal so far lacks the necessary Congressional support.

What Happens January 1, 2013?

Effective January 1, 2013, the Bush-era tax cuts are scheduled to expire. Changes expected in 2013 as a result of the sunset provisions include the following Tax rate increases:

Beginning January 1, 2013, the top tax rate will rise more than 13 percent, from 35 percent to 39.6 percent. At the same time, the maximum tax rate on long-term capital gains will go from 15 percent to 20 percent — a 33 percent increase. And the maximum tax rate on dividend income, currently capped at 15 percent, will increase to 39.6 percent (a 164% rise), since dividends will be taxed like other ordinary income.




The tax implication of a business sale varies with each transaction.  Only a professional tax advisor can determine how you might be affected.