The end for the Bush administration tax cuts may be near. Those rock-bottom tax rates for long-term capital gains and qualified dividends you’ve cherished the past few years are set to expire after 2010 … unless Congress takes action and the president agrees.
Strategy: Examine your investment options. Depending on your situation, you may want to accelerate capital gains and dividends into the current year or defer them into succeeding years.
43 Tax Strategies to Save Taxes Year-Round helps you realize all the credits and deductions you're entitled to — and rescue some that might otherwise be lost. Get your copy now!
Here’s the whole story: Prior to 2003, the maximum tax rate on long-term capital gain was 20%. Dividends were taxed at ordinary income rates reaching as high as 39.6%.
But a 2003 law lowered the maximum tax rate to 15% for long-term capital gains and “qualified dividends” received through 2008; 5% for taxpayers in the 10% and 15% ordinary income brackets. Furthermore, the 5% rate for lower-income taxpayers was reduced to 0% for 2008. Subsequently, these tax cuts were extended through 2010.
As things stand now, the lower rates will expire at year-end. On Jan. 1, 2011, the maximum tax rate for long-term capital gains will revert to 20% for higher-income taxpayers; 10% for taxpayers in the lowest 15% tax bracket. Dividends will again be taxed at ordinary income rates. Even worse: For 2011, the top two ordinary income rates of 33% and 35% are scheduled to jump to 36% and 39.6%, respectively. And other tax rate increases could be on the way.
There's no vacation from tax planning — and if you wait too long to get started, you'll miss out on deductions and credits that could keep money in your pocket and out of the IRS's reach. Learn More
Don’t stand by idly while the 2003 tax cuts go by the boards. Here are five ways you might wring more tax savings from capital gains and dividends.Strategy 1. Cash in your stock winners before 2011.
Strategy 2. Harvest your stock losers after 2010.
Strategy 3. Roll over or sell “small biz” stock.
Strategy 4. Take dividends in 2010.
Strategy 5. Pass up the installment sale tax break.
Any ONE of these techniques could save you a ton of money at year's end. Yet 43 Tax Strategies to Save Taxes Year-Round gives them ALL to you – in one convenient, easy-to-manage source.
And to make planning and managing easier than ever, we’ve divided the report into three sections:
Part I Jan.–April: Tax Return Planning
Part II May–Aug.: Midyear Tax Planning
Part III Sept.–Dec.: Year-End Tax Planning
Get your copy today!
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