Please use the following link to access our personal tax checklist for 2012:



After much fighting the U.S. Congress managed to hobble together a series of tax changes that were acceptable to President Obama called “The American Taxpayer Relief Act". Whether American taxpayers will see much relief is yet to be determined.

Personal Income Tax
Personal income tax rates were increased to 39.6% for individuals earning more than $400,000. On top of that is state tax which ranges from 0% in states like Florida to a high of 11% in Hawaii and Oregon. On top of that many cities and counties levy an additional income tax so that in some jurisdictions in the U.S. the overall income tax rates exceed 50%.

The tax on personal capital gains is increased from 15% to 20% federally for individuals earning more than $400,000. Those earning less than $87,850 will be exempt from tax on capital gains. Between $87,850 and $400,000 the rate will remain at 15%.

The phase-out of exemptions for those earning more than $250,000 has been reinstated while the AMT (Alternative Minimum Tax) exemption has not been changed but has been made a permanent change.

A Medicare tax has been introduced (and you thought Obamacare was free). The rate is 3.8% for taxpayers with income over $200,000. The tax rate is charged on the lesser of net investment income and the excess income over $200,000. For some taxpayers this will increase the Federal tax rate to 43.4%.

The $200,000 threshold is not indexed.
In addition to the above Medicare tax the existing tax will be increased by 0.9% on wages and self-employment income in excess of $200,000.

Estate and Gift Tax
With some finality the Estate tax exemption has been made permanent at $5 million indexed to inflation. The 2013 exemption is expected to be about $5.25 million. The tax rate has been increased from 35% to 40%.


Effective April 1, 2013 there will be two changes of note for provincial tax. On that date British Columbia will step back into the 20th century by reverting from HST to PST. The new PST rate will be 7% in addition to the 5% GST.

On that same date PEI will step into the 21st century by switching from a PST model to HST. The new rate will be combined at 14%.